"Bank of America Corp. directors decided to hire Brian T. Moynihan as chief executive after the U.S. government raised concerns about the potential political impact of the compensation package proposed by an outside candidate for the job, according to people familiar with the situation.
As the Charlotte, N.C., bank was pursuing Bank of New York Mellon Corp. CEO Robert Kelly last week, a Bank of America board member asked Treasury Secretary Timothy Geithner for his opinion on the $35 million to $40 million compensation proposed by Mr. Kelly, one of these people said.
As part of his discussions with the board's search committee, Mr. Kelly sought about $20 million to buy out unvested Bank of New York Mellon shares and options, plus $15 million to $20 million in annual compensation as chief executive. All but $1 million of that amount was to be paid in stock, people close to the talks said.
In response, Mr. Geithner suggested that Bank of America approach Treasury pay master Kenneth Feinberg for his views on what would be politically palatable. Mr. Feinberg said the total amount might cause alarm and be seen as excessive, according to people familiar with the exchange.
...The government's role in the 11-week CEO search is another sign of how regulators are shaping the new banking landscape after coming to the rescue of ailing financial institutions."
