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.

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well. Bestselling author Mark Bittman teaches James Hamblin the recipe that everyone is Googling.

Join the Discussion

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

blog comments powered by Disqus

Video

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.

Video

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Video

The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.

Video

Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.

Video

Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Business

Just In