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FOOTNOTED

Despite ‘Disappointing’ 2007, BofA’s Lewis Made $25 Million

05/12/08

Each year, many quirky individuals waving a few shares of stock express their viewpoints through shareholder proxy proposals.

In Bank of America’s last proxy statement, a shareholder from Eugene, Oregon proposed new compensation limits for Chief Executive Officer Kenneth D. Lewis. Pooh-poohing the idea that Lewis’s pay should match that of other banking industry CEOs, the shareholder employed this argument: “Like many of our parents said, if everyone else jumped off a bridge, would you?”

This reasoning did not sway BofA, which expressed its opposition to the proposal.

Cut Backs

Still, BofA wants to be seen as a good guy, compensation-wise, and has taken a few admirable steps. (See, this column can be nice sometimes.) For example, several years back, Lewis tore up his employment agreement, so he’s no longer assured of cash severance pay if he loses his job.

In 2007, a year marred by what the proxy terms “disappointing” results, Lewis’ compensation came to nearly $25 million, according to the official SEC-mandated compensation table.

Apparently BofA thought that number sounded high, so they helpfully provided an alternative, unofficial compensation table calculating his equity awards by a different method. But even in this alternative universe, Lewis still raked in over $16 million.

Financial Planning

His perks were pretty OK too, adding up to $212,000, including $127,000 for personal travel on company planes.

Meanwhile, past Chairman Charles Gifford, an outside director who has a consulting agreement with BofA, racked up a hearty $1 million in “aircraft usage,” along with $344,000 to help ease his tax burden on that perk.

Each senior executive also enjoyed around $16,000 worth of help with personal financial planning and tax preparation.

Rent Payments

According to a footnote, this assistance was provided by BofA employees for whom the company paid “actual direct expenses” that included compensation, travel and, oddly, rent.

These unexplained rent payments are making my imagination run wild. Could BofA be housing accountants in corporate apartments and keeping them on call for midnight financial-planning emergencies?

If so, I anticipate another shareholder proposal.

Wendy Fried, a freelance writer, is a contributing editor at footnoted.org and also blogs about matters corporate at her own site, proxyland.blogspot.com.