You can curse him a million times for emptying your pockets; you can praise him a billon for saving other companies... Call him a ‘hero’; call him the ‘Don Quixote’ who led The Bank of America!
Born in Meridian, Mississippi, Lewis has tried hands at many jobs since the age of 12, including the ones at steel mills and filling stations, and even direct-selling (of green cards). He earned a Bachelor’s degree (Finance) in 1969 from Georgia State University and holds an executive programme degree from Stanford. He split with his first wife in 1978 and two years later, his ‘present’ became his ex-boss’ ex-secretary, Donna. Today, they have two children & two grandchildren. He started his journey with BofA (then called North Carolina National Bank) in 1969 as an analyst. He steadily rose up the ranks and 30 years later, he became the COO. He won the crown of CEO in April 2001 (replacing Hugh McColl), and Chairman in 2005. Now that was quite an upward glide for Lewis; his corporate performace graph sadly, following the opposite direction. Imagine this: in 2003, BofA was the world’s 4th-most-profitable company. It slipped to 12th in 2007 and 23rd in 2008. What worst; its expected negative performance this year will see it being booted out of the profit-makers list!
And though his ‘trust-me’ act of purchasing up to 400,000 BofA shares as “an outstanding long-term investment”, is an effort on his part to infuse confidence in his company’s investors, one truth stands – he should have worked towards achieving ‘shareholder wealth maximisation’ and not ‘bailout package maximisation’. Lewis perhaps forgot that the bourses don’t reward well ‘brave CEOs, on the lookout for quick glory’ (yes, he should have left it to the government and Fed!). Perhaps, even he was left pondering over what to choose – shareholder wealth or the bravery award for financial rescue (and obviously, he made the wrong choice)!
And though his ‘trust-me’ act of purchasing up to 400,000 BofA shares as “an outstanding long-term investment”, is an effort on his part to infuse confidence in his company’s investors, one truth stands – he should have worked towards achieving ‘shareholder wealth maximisation’ and not ‘bailout package maximisation’. Lewis perhaps forgot that the bourses don’t reward well ‘brave CEOs, on the lookout for quick glory’ (yes, he should have left it to the government and Fed!). Perhaps, even he was left pondering over what to choose – shareholder wealth or the bravery award for financial rescue (and obviously, he made the wrong choice)!
Source : IIPM Editorial, 2012. An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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and Arindam Chaudhuri (Renowned Management Guru and Economist).
For More IIPM Info, Visit below mentioned IIPM articles.
Zee Business Best B-School Survey 2012
Prof. Arindam Chaudhuri’s Session at IMA Indore
IIPM IN FINANCIAL TIMES, UK. FEATURE OF THE WEEK
IIPM strong hold on Placement : 10000 Students Placed in last 5 year
IIPM’s Management Consulting Arm-Planman Consulting
Professor Arindam Chaudhuri - A Man For The Society….
IIPM: Indian Institute of Planning and Management
IIPM makes business education truly global
Management Guru Arindam Chaudhuri
Rajita Chaudhuri-The New Age Woman
IIPM B-School Facebook Page
IIPM Global Exposure
IIPM Best B School India
IIPM B-School Detail
IIPM Links IIPM : The B-School with a Human Face
