Bank of America Corp. said Thursday that Merrill Lynch & Co. chief executive John Thain will have a major role in the combined company to be created by the merger of the two financial giants.
Bringing on Thain, a former Goldman Sachs Group Inc. executive and New York Stock Exchange chief executive, adds a major player in the hunt to eventually succeed Bank of America CEO Ken Lewis, who at age 61 does not have a clear No. 2 executive.
The Charlotte bank also outlined an ongoing role for Brian Moynihan, the current head of corporate and investment banking who will cede his post to Thain. He has been seen as a rising star in the company, so finding a new role for him was significant.
Bank of America spokesman Jim Mahoney said Thain's new role doesn't mean he has been tapped as the bank's next CEO. “There is no commitment regarding succession,” he said. “He will be a key member of Ken Lewis' management team.”
Determining Thain's position as a top president was one of the first major decisions in the deal, which was announced Sept. 15 as Merrill Lynch and other investment banks faced intense questions about their financial soundness. The acquisition will add a major brokerage and investment banking operation to Bank of America's massive consumer bank. The $50 billion deal, which needs shareholder and regulatory approval, is expected to close early next year.
Thain, 53, will become president of global banking, securities and wealth management once the merger is completed. He will be in charge of what is now corporate and investment banking and what is most of the bank's wealth and investment management unit, which will be merged with Merrill's similar functions.
“I am delighted that John has agreed to join Bank of America,” Bank of America chief executive Ken Lewis said in a statement. “His experience and expertise will be invaluable as we put our two companies together and move forward as the premier financial services company in the world.”
Added Thain: “This is an opportunity to create what will be the leading financial institution in the world. I look forward to working with Ken and the business leaders at both companies as we build the world's premier financial services firm.”
Moynihan will continue as president of corporate and investment banking at Bank of America until the merger is completed and will take on a new role, effective immediately, leading private equity and global operations. He will continue that new role after the merger, reporting to Lewis.
“Our company will look quite different after the merger,” Lewis said. “I have asked Brian to lead an effort that will redefine our business model, taking into account the strengths of both predecessor companies and our extensive opportunities around the world. Brian's background in corporate development, wealth management and corporate and investment banking make him the ideal person to lead this initiative. As part of this effort, he is to ensure that we have optimized our infrastructure investments to drive growth in the merged company.”
Moynihan also will lead the merger transition for Bank of America, teamed with Merrill Lynch chief administrative officer Tom Sanzone. Jim Eckerle, current enterprise transition executive at Bank of America, will continue that role in charge of the bank's LaSalle and Countrywide Financial Corp. acquisitions.
Mahoney said the role of other top executives is still under discussion. Keith Banks is Bank of America's current head of wealth and investment management. At Merrill Lynch, Greg Fleming serves as president and Robert McCann leads global wealth management. Lewis has said Bank of America will keep the Merrill Lynch name for the brokerage.
Lewis, CEO since 2001, has made bold acquisitions to shape Bank of America into a dominant financial player, but his succession has remained unclear.
Moynihan, who joined the company in the 2004 FleetBoston Financial Corp. acquisition, had emerged as a candidate after leading the company's wealth management division and restructuring the corporate and investment bank. Now Thain, a longtime Wall Street player, has been added into the mix. Moynihan remains based in Boston but likely will spend more time in Charlotte, Mahoney said. Thain will be based in New York.
Other possible successors have longer tenures with Bank of America and deeper ties to Charlotte:
Barbara Desoer, now based in California, has an important but challenging role leading the combined mortgage company after the bank's Countrywide acquisition.
Based in Charlotte, risk executive Amy Woods Brinkley has guided the bank through the credit crunch, although it has suffered significant loan losses and writedowns, like many other institutions.
Based in Charlotte, consumer bank head Liam McGee has long led the bank's signature business, but his responsibilities have been pared in recent months.
Bank of America does not have a mandatory CEO retirement age, spokesman Scott Silvestri said.