BofA Management Shake-up
Two top executives of Bank of America are out of work and another has been demoted in a major management shuffle announced late yesterday. CEO Brian Moynihan says the restructuring is part of his plan to "de-layer" and "simplify" operations at the bank. These high-level layoffs are the first sign Moynihan's cost-cutting plans will indeed bring major changes to Bank of America. Joe Price, who led consumer banking, and Sallie Krawcheck, who ran wealth management, are out. Another senior executive - Barbara Desoer who handles the home loan division - will no longer report directly to the CEO. All of their divisions will now be overseen by David Darnell and Tom Montag in the newly-created job of co-chief operating officer. Darnell has been with bank for several decades. Montag came on board with the acquisition of Merrill Lynch and is Bank of America's most highly paid executive. Nancy Bush, analyst and contributing editor for SNL Financial, says the shake-up streamlines the bank's structure: "The important lines of business are now divided into retail and commercial, and under two very strong individuals," notes Bush. "I think that makes results - rather than rhetoric - be the important thing." Bush says Bank of America has effectively removed a layer of operations management and shown it is serious about cutting costs. The change has also sparked speculation among analysts that Bank of America's board is putting a succession plan in place. Bush does not think the board is looking to oust Moynihan, but she says the new structure does create a solid "Plan B" as the bank struggles to deal with mortgage-related losses and lawsuits. "There is a significant benefit here for the board, in that they have two strong candidates in case Brian does not work out - in case these issues are not able to be resolved," says Bush. Thousands of lower-level Bank of America employees are also expected to lose their jobs in the cost-cutting plan Moynihan calls "Project New BAC." BAC is the bank's stock symbol. It hasn't traded above $10 in more than a month.