Writedowns, Blocked Pay Make Rough Day for BofA's Ken Lewis

Bank of America, the nation's beleaguered leader in commercial lending, posted a $1 billion loss in the third quarter. Despite recent gains from its Merrill Lynch merger, the company is still dealing with commercial defaults and billions of dollars in consumer credit losses. U.S. consumers' mortgages and credit cards account for about 60 percent of the bank's loan portfolio, according to Reuters.


What's more, White House pay czar docked outgoing BofA CEO Ken Lewis $1.5 million from his salary this year. Rough day for the boss, but as Felix Salmon helpful contextualizes, cutting $1.5 million out of a yearly compensation worth $70 million (and overall compensation, including deferred stock compensation) is a bit like denying a morbidly obese person the tiny Maraschino cherry on top of a three-pound sundae.

"Since [pay czar Kenneth] Feinberg had no real jurisdiction over the big lump sum due Lewis, he just decided to bring the sum he could control down to zero," Salmon writes. And good on Ken (the czar, not the chief exec). To say Lewis has performed unevenly since the crash of 2008 would be a diplomatic understatement. He was bullied by the Treasury Dept, he likely lied to shareholders about the Merrill merger, he pushed out Merrill CEO John Thain for a somewhat manufactured bonus controversy and still presides over a money-losing bank at a time when other banks like JPMorgan are racking up intimidating profits.

To read more about Lewis' year, this.

Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register with Disqus.

Please note that The Atlantic's account system is separate from our commenting system. To log in or register with The Atlantic, use the Sign In button at the top of every page.

blog comments powered by Disqus

Video

A Stop-Motion Tour of New York City

A filmmaker animated hundreds of still photographs to create this Big Apple flip book

Video

The Absurd Psychology of Restaurant Menus

Would people eat healthier if celery was called "cool celery?"

Video

This Japanese Inn Has Been Open For 1,300 Years

It's one of the oldest family businesses in the world.

Video

What Happens Inside a Dying Mind?

Science cannot fully explain near-death experiences.

More in Business

Just In