Target Rich

Would you want to run a big bank? It could be bad for your health.

The recent downturn has been brutal on bank chiefs. Pay and promotions have been politicized, and the government has shown a need to “get tough.”. Ken Lewis of Bank of America is an easy mark. He makes a $1.5 million in salary, and oversees billions in bonuses while taking $45 billion in government bailout money.

But banking has never been popular. When you can’t afford a Rolex watch, you don’t complain about how unfair it is that they won’t cut the price for you. But when the bank denies you a loan, it seems so unfair. And they still ask for your deposits!

So it came as a surprise that Lewis and his Board were reelected yesterday. Still, that doesn’t mean he’s home free. If the politicians get exercised, Ken Lewis may have to pay a visit to former GM chief Rick Wagoner. Because in an era of intervention, the air we breathe is political.

Douglas R. Tengdin, CFA
Chief Investment Officer
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