BofA's Kenneth Lewis questioned on Countrywide, coal

Bank of America Corp.'s annual meeting Wednesday in Charlotte featured some tough questions for Chief Executive Kenneth Lewis, but no one called for his removal, and at least one gadfly shareholder gave him reason to smile.

During the company's two-and-a-half-hour meeting at the N.C. Blumenthal Center for Performing Arts, shareholders and investor activists pressed Lewis repeatedly on the company's pending acquisition of Countrywide Financial Corp. and its financing of companies that build coal-fired power plants and engage in mountaintop-removal coal mining.

Regarding Countrywide, which BofA is set to buy for $4 billion in July, shareholders pushed Lewis on the potential risks -- in both finances and reputation -- in digesting the troubled mortgage lender. Shareholder activist Evelyn Y. Davis called Countrywide a "piece of junk" and "garbage" and pleaded with Lewis, whom she praised often, to call off the deal

Content Continues Below

"I am very fond of you personally," she said to Lewis, who couldn't help but break into an occasional smile during her long soliloquies at the microphone. "Get out of this please, Ken, while you can."

Lewis responded by noting BofA's announcement Tuesday that it would discontinue some nontraditional mortgage products when it closes on Calabasas-based Countrywide (NYSE:CFC) and will rebrand the operation as well. "The company that you will see will be a very different company" from today's Countrywide, he said.

Earlier this month, Lewis was named "Fossil Fool of the Year" by the Rainforest Action Network and other environmental organizations. Environmental activists protested on Tryon Street outside the meeting, and Lewis faced repeated criticism from shareholders concerning the bank's financing of power companies' construction of coal-fired plants. Lewis said BofA is trying to find some practical ways to work through the issue and "would like to phase out the bad stuff that's going on."

The Charlotte-based bank (NYSE:BAC) has allocated $10 billion to invest in alternative energy sources and has said it will seek to shift more lending to those sources. But Lewis has also noted the large percentage of energy derived from coal and has previously said he doesn't want "the lights to go out."

Near the end of Wednesday's meeting, he grew exasperated as environmental questions were repeatedly posed to him.

"I don't know what else I can say," he said, holding up his hands. "Did you listen to what I've been saying?"

Eight shareholder resolutions were defeated at the meeting, but a few garnered strong support: A proposal suggesting a shareholder advisory vote on executive compenasation and another that suggests shareholders be allowed to call a special meeting both received 44 percent of the votes cast.

On Monday, BofA reported first-quarter earnings of $1.21 billion, or 23 cents per share, down from $5.26 billion, or $1.16 per share, a year earlier.

Lewis told shareholders the bank "makes no excuses" for its disappointing results over the last three quarters. But he said he remains confident in the company's ability to generate strong results in the future, in large part due to the bank's size and diversity.

"We have built Bank of America over the past 20 to 30 years, in large part, to succeed in times like these," he said.