"Bank of AmericaCorp. directors are hitting a new hurdle as they hunt for the giant bank's next CEO: Obama administration pay czar Kenneth Feinberg.
William Demchak, senior vice chairman at PNC Financial Services Group Inc., spurned a feeler last week from a recruiter for the Charlotte, N.C., bank, according to a person familiar with the situation.
Mr. Feinberg's required approval of the compensation package for whomever succeeds Kenneth D. Lewis was a major factor in the decision, this person said. Mr. Demchak also didn't see the bank's situation as fixable given the government's heavy influence over the company.
The bank would 'get blasted' for buying out Mr. Demchak's shares in PNC, this person said. The 46-year-old executive helped turn around the Pittsburgh bank and is widely viewed as the likely successor to PNC Chief Executive James Rohr.
Such purchases are common in hirings of top company executives. According to a securities filing, Mr. Demchak earlier this year held PNC shares valued at $34.3 million based on the bank's stock price Friday.
Mr. Feinberg's role as overseer of seven companies that received huge government aid gives him enormous influence in the succession process at Bank of America. Once directors make a decision and negotiate contract terms with their chosen CEO, the compensation package must be submitted to Mr. Feinberg for approval. Mr. Feinberg declined to comment.
Some directors at Bank of America worried even before Mr. Demchak's rejection that the limits imposed by Mr. Feinberg were snarling the succession process, said a person familiar with the board's deliberations. For example, cash salaries paid to the highest-earning executives at the seven companies getting exceptional federal aid were capped at $500,000 for 2009. Without the restrictions, the pool of available candidates to succeed Mr. Lewis would be larger, this person said."
