Before Sallie Krawcheck could promote the bull Monday, she had to wrestle with the elephant in the room.
Holding her first news conference since becoming Bank of America Corp.'s head of wealth management and brokerage operations, Krawcheck intended to tout a $20 million advertising campaign to resurrect Merrill Lynch & Co.'s iconic symbol, the bull. She just couldn't get away from the one thing she wanted to get away from: lingering questions about B of A Chief Executive Ken Lewis' decision last week to step down at yearend.
Krawcheck, who had been at Citigroup Inc. two years ago when CEO Charles O. Prince resigned without an immediate successor named, made it clear in opening remarks that she would be "dodging and weaving" any inquiry tied to the vacuum left by Lewis. When a question about succession finally surfaced late in the question-and-answer session, she jokingly wondered aloud if she was "CEO repellent."
Though Krawcheck did her best to stay on point while avoiding questions about a succession process where she has been mentioned as one of six internal contenders, observers said the Lewis drama will remain a distraction for top executives until the board appoints an interim or permanent chief executive.
Donald Mullineaux, a finance professor at the University of Kentucky, said the issue "is right in everyone's face, and it is hard not to have people dwelling on it." He said that concerns are likely heightened internally more than among clients, but that in any event, "they would be better off resolving the uncertainty" and addressing the issue "promptly, rather than drag it out."
A protracted succession could prompt those within the bank to jockey for position with board members and any leading contenders for CEO, some observers said.
"If you are a B of A executive, you're caught in the middle," said D. Anthony Plath, a finance professor at the University of North Carolina at Charlotte, who believes the board will address the issue within the next two weeks. "You can't do your job, because it is hard to articulate strategy and direction when your boss is a lame duck. So it all becomes a tap dance and internal politicking."
B of A's board is moving forward, last week forming a committee that will vet internal and external candidates. The $2.3 trillion-asset company has not announced the hiring of an executive search committee, though a spokesman confirmed that some insiders are lobbying for such a move.
Published reports have said the board is working on an emergency plan should Lewis need to step down earlier than planned. He faces possible charges from the Securities and Exchange Commission and the New York Attorney General's Office over the sufficiency of disclosures to investors about losses and bonuses at Merrill Lynch, which B of A bought Jan. 1.
Michael W. Robinson, a senior vice president at crisis communications firm Levick Strategic Communications, said Krawcheck did the right thing by keeping her appointment with the media despite the uncertainty surrounding the CEO position. "Cancelling this press conference would have been a mistake," said Robinson, who has worked in the past for the Justice Department and the SEC. "If they're smart, they will have an opportunity to weave this narrative, reinforce their business plan, and rebuild the trust they have lost with consumers and investors."
Krawcheck, just eight weeks into her new post, aimed to do that, announcing a campaign where the resurrected bull will represent renewed momentum for B of A and its clients. The Charlotte company will spend the $20 million this quarter on television and print ads touting a willingness to "help" clients rebuild, she said.
Her unit is also working on its 2010 budget and a three-year strategic plan that should include adding to its 14,994 financial advisers; she would not provide any targets for growing that work force. "We're sick of the rubbernecking. There is a sense of cautious optimism among the group but also a sense of 'let's go.'"
