Lewis voted out as BofA chairman, still CEO

Kenneth Lewis has been replaced as chairman of the board atBank of America Corp.

The company announced the move in a news release Wednesday evening. The change follows the bank???s annual meeting where shareholders voted 50.3 percent in favor of a resolution to separate the roles of chairman of the board and chief executive officer. Lewis had held both positions.

The BofA board appointed Walter Massey as the new chairman Wednesday evening. Massey has been a director for the bank since 1998 and is a member of the its audit committee. He is a former president of Morehouse College in Atlanta. He also is a director at McDonald???s Corp.

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Lewis will remain as the company???s president and chief executive, after the board unanimously backed him Wednesday afternoon, the bank says. Lewis also maintains his seat on the board of directors.

During the annual meeting, which started at 10 a.m. Wednesday, a number of shareholders spoke out for and against Lewis and the bank???s board of directors.The California Public Employees Retirement System, which owns 22.7 million shares of BofA, was planning to vote against Lewis and the entire board.

Some shareholders have questioned the company???s acquisition of Merrill Lynch & Co. and why shareholders weren???t told about mounting losses at the Wall Street firm before they voted on the deal in December. Lewis has said he???s limited in what he can say about the deal due to pending litigation.

There are 11 resolutions on the proxy, including eight shareholder resolutions.

Lewis has come under tremendous fire from investors who are angered by the bank???s acquisition of Merrill Lynch. The Charlotte, N.C.-based bank (NYSE: BAC) discovered massive losses at Merrill at the end of 2008 but quietly completed the deal under pressure from the government.

When it reported fourth-quarter earnings, BofA announced that Merrill???s losses for the period were more than $15 billion and that it was taking an additional $20 billion in capital from the Treasury, which had agreed to cover losses on $118 billion in toxic assets at Merrill and BofA. The government has invested a total of $45 billion of capital into the bank.

As of Tuesday???s closing price of $8.15, the bank???s share price had dropped 42 percent in 2009 and was down 76 percent since the Merrill deal was announced in September. The bank???s stock dropped nearly 9 percent Tuesday on the news that BofA had failed regulators??? preliminary stress test and might need additional capital.

???We???re still waiting to hear from our regulators about what will be required,??? Lewis said this morning in response to a question about whether the government???s preferred stock might be converted to common stock due to a capital shortfall.

BofA reported first-quarter earnings of $2.8 million, or 44 cents per share, up from $1.02 billion, or 23 cents per diluted share, a year earlier. But nonperforming assets at the company increased to $25.7 billion from $7.8 billion a year earlier. In 2008, the company earned $2.5 billion, dropping from $14.8 billion in 2007.