By Jonathan Stempel
NEW YORK (Reuters) - A group that works with union pension funds called for the ouster of Bank of America Corp
CtW Investment Group, which said its affiliated funds own 116 million Bank of America shares, faulted Lewis for not backing out of the merger or revealing Merrill's losses in a timely manner, and letting Merrill pay $3.6 billion in executive bonuses just before the merger closed.
It said Lewis' actions have contributed to a 90 percent drop in Bank of America's share price since the merger was announced last September 15. The merger closed on January 1.
Lewis took "outsized, reckless risks" by acquiring Merrill, and his removal "is necessary to restore investor confidence," CtW Executive Director William Patterson said in a March 5 letter to O. Temple Sloan Jr, the bank's lead outside director. The Washington, D.C. group has undertaken shareholder campaigns against other companies in the past.
CtW said if Lewis is not removed, shareholders should vote against re-electing Lewis, Sloan and Thomas Ryan, chairman of the corporate governance committee, to the bank's board. Lewis, 61, has run Bank of America since 2001.
Bank of America, Sloan and Ryan did not immediately return requests for comment. Sloan runs auto parts company General Parts International Inc, while Ryan is CEO of drugstore chain CVS Caremark Corp
Merrill lost $15.84 billion in the fourth quarter. New York Attorney General Andrew Cuomo is investigating whether the bonuses violated securities laws, and has subpoenaed seven executives who received large bonus payouts, a person familiar with the investigation said on Wednesday.
Both Lewis and former Merrill CEO John Thain have testified under subpoena.
Lewis has said he tried to back out of the merger in the middle of December, but that federal regulators urged him to close. Bank of America received $20 billion of new capital from the government in January to help absorb losses at Merrill.
CtW did not offer any names as possible replacements for Lewis. "The ability of Bank of America to survive without going through some kind of receivership is going to be enhanced by having new, credible leadership," CtW spokesman Rich Clayton said.
Bank of America's annual meeting is scheduled for April 29, down the street from its Charlotte, North Carolina, offices. It has urged stockholders to reject eight shareholder proposals, including one to split the chairman and chief executive roles.
Shares of Bank of America fell 43 cents to $3.16 on the New York Stock Exchange. They closed at $33.74 before the Merrill merger was announced.
(Reporting by Jonathan Stempel; Additional reporting by Jessica Wohl in Chicago; editing by John Wallace and Jeffrey Benkoe)
