CHARLOTTE, N.C. — Bank of America's board of directors has chosen consumer banking chief Brian Moynihan to replace Ken Lewis as CEO on Jan. 1.
Their pick of an internal candidate Wednesday followed unsuccessful attempts to hire a star industry executive for the top job at the nation's largest bank. Those negotiations were stymied by restrictions imposed by government pay czar Kenneth Feinberg that would have forced an outsider to take a big pay cut this year.
The move "draws to a close what is probably the executive search from hell," said Tony Plath, a finance professor at the University of North Carolina at Charlotte. "They needed to find someone to end the drama so that the bank can get back to regular business, but at the same time I am surprised by their choice."
Moynihan, 50, joined the Charlotte, N.C., bank as part of its 2004 purchase of FleetBoston Financial Corp. Over the past year, he has served as BofA general counsel, head of global wealth management and consumer bank chief.
"I am honored to have the opportunity to lead this important company," Moynihan said in a statement.
The new CEO faces many daunting tasks. He must juggle regulatory investigations into the bank's 2008 acquisition of Merrill Lynch while trying to repair relationships with regulators and members of Congress who sharply criticized Lewis after the bank required $45 billion of federal bailout loans to prevent its failure.
"Brian's wide range of experience, his relationships inside and outside of the company, and his demonstrated ability to understand business dynamics and effect constructive change made him the best person for the position," said Dr. Walter E. Massey, chairman of Bank of America, who led the CEO search.
Moynihan also will join the bank's board of directors.
Lewis, 62, announced his departure in September in a move that surprised Bank of America's board and left it scrambling for a replacement with no clear succession plan in place.
One thing Moynihan doesn't have to worry about is repaying the government loans. The bank received $25 billion from the government's Troubled Asset Relief Program, or TARP, when the credit crisis peaked in fall 2008. It then received an additional $20 billion shortly after it acquired Merrill Lynch in what was a heavily scrutinized deal. Bank of America repaid the money it received from TARP on Dec. 8.