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Add Bob Kelly to the list of financial services executives who aren't clamoring for the top job at Bank of America Corp.
The Bank of New York Mellon Corp. CEO was approached in the past couple of weeks about becoming the Charlotte bank's leader but he said he had no interest, a person familiar with the situation said Monday. Kelly, who previously served as Wachovia Corp.'s chief financial officer, wasn't contacted directly by the bank but through an acquaintance, the person said.
Kelly's lack of interest is the latest sign that the bank's board is finding it tough to replace Ken Lewis, who announced Sept. 30 that he's stepping down at year's end. Lewis, CEO since 2001, has been under fire for his Merrill Lynch & Co. acquisition, but the timing of his decision apparently blindsided the board.
Experts said the board members are in a difficult spot. They have to find a candidate capable of running a company as complicated and diverse as Bank of America at a time when it's under close government scrutiny. And the normal enticement for this sort of job - big paychecks - has been crimped, as the federal government places strict rules on executive pay at companies that hold government loans. Last month, the federal pay czar asked Lewis to give up his 2009 salary.
Rochdale Securities analyst Dick Bove wrote Monday that he couldn't figure out why the board or the government "would believe that an outsider with a good job would go to Bank of America where his pay would be restricted and he would be forced to submit to bullying by the banking regulators."
Complicating matters, the board choosing Lewis' successor has been dramatically overhauled since spring. Under government pressure, nine directors have departed and six new ones have joined. The board members are probably still getting to know each other, making it harder for them to agree on succession plans, said a corporate CEO who has been through multiple leadership transitions who did not want to publicly discuss the bank's issues.
Lewis made the job more difficult by announcing his retirement plans before a successor was in place, forcing the directors to make the decision in a public spotlight, the CEO said. Perhaps Lewis was frustrated that the board didn't take his suggestion of an internal candidate, he added.
"You couldn't imagine a more difficult place to be when it comes to picking a successor. It's a witches' brew," the CEO said. "The degree of difficulty on a scale of 1 to 10 would be a 12."
Many corporate governance experts point fingers at the board, saying they're astounded that a company as big and high-profile as Bank of America didn't have a leader in waiting, ready to step in right away.
"It's just amazing, right?" said Tejus Trivedi, founder of InvesGuard, which rates boards on corporate governance and other issues. "Bank of America didn't have anything. Just nothing."
A labor union pension fund on Monday said it filed a shareholder proposal that would require the company to adopt and disclose a CEO succession policy. The union said it tried to submit the proposal last year, but the bank didn't put it up for a vote, with the permission of the Securities and Exchange Commission.
"Shareholders have a right to know whether the basic governance policies of the corporations they invest in are sound - or whether, as in the case with Bank of America, there are reasons for concern," said Terry O'Sullivan, general president of the Laborers' International Union of North America pension funds.
Since the announcement of Lewis' departure, the bank's shares are down more than 13 percent, compared to a nearly 10 percent decline in the KBW Philadelphia Bank Index during the same period. The bank's shares climbed less than 1 percent Monday, to $14.63.
Kelly, whose lack of interest in Bank of America was first reported by the Wall Street Journal, was an intriguing possibility because of his Charlotte connections.
He was CFO at Charlotte's Wachovia (now part of Wells Fargo & Co.) from late 2000 until he left in 2006 to become CEO of wealth manager Mellon Financial Corp., which he soon merged with Bank of New York. That merger has fared well, and the company was one of the first to pay back government loans it received in the financial crisis. He didn't express interest in Wachovia's top job when it opened up last year.
Kelly isn't the first outside candidate to dismiss the bank's advances. Through spokespeople, BlackRock CEO Larry Fink and MasterCard Inc. President Ajay Banga have said they're not interested in leaving their current jobs.
Michael O'Neill, a new Citigroup board member with ties to Bank of America, is also the subject of speculation lately. O'Neill was the chief financial officer at San Francisco's BankAmerica Corp. when it merged in 1998 with Charlotte's NationsBank Corp. to become Bank of America.
He stayed briefly at Bank of America before he left to become CEO of British bank Barclays PLC, although his tenure there was brief because of health issues. He later was CEO of Bank of Hawaii from 2000 to 2004. O'Neill could not be reached for comment.
After Bank of America initially appeared to be homing in on inside candidates, some investors pushed back, saying they wanted a leader untainted by the bank's troubles. According to people familiar with the situation, as the search lingers, some investors are questioning how seriously the bank is looking for a CEO from outside the company.
The leading inside candidates are consumer banking head Brian Moynihan and chief risk officer Greg Curl. The board's six-member search committee is dominated by directors from the former FleetBoston Financial Corp., who are believed to favor Moynihan, a former Fleet executive. Bank of America bought Fleet in 2004.
While the bank can't offer big money for the job, Anthony Sabino, a partner at Sabino & Sabino in New York, said the board might be able to appeal to a candidate's ego.
"The only sensible way to pitch this job is, 'This is a tremendous challenge, but if you're up for it, you will go down in history as the man or woman who saved Bank of America,'" he said.
The longer the CEO remains a question mark, the more uneasy its stakeholders will probably get.
News about candidates turning down the job doesn't help, either.
"If you start to get highly qualified candidates who say, 'No, not interested,' that tells you that things are more troubled than you think," Sabino said.
