Bank of America Corp. Chief Executive Officer Brian Moynihan named the fourth finance chief of his tenure in a broad shakeup as he seeks to overcome regulatory hurdles and reverse shrinking revenue. The shares fell.
Paul Donofrio, 55, will replace Bruce Thompson, the company said late Wednesday in announcing a series of changes and promotions. Thompson, once considered a potential successor to the CEO, is leaving to pursue opportunities elsewhere, according to two people with knowledge of the situation. His relationship with Moynihan had deteriorated recently over disagreements about where to make tactical investments to boost revenue, one of the people said.
The moves mark Moynihan’s most sweeping leadership changes since 2011, when wealth management head Sallie Krawcheck departed along with a former chief financial officer, Joseph Price. Thompson had already taken the CFO post that year after rising through investment banking roles and overseeing risk.
Moynihan, who became CEO in 2010, has been consolidating power in the past year, adding the chairman title in October. As his longest-serving CFO, Thompson repaired the firm’s balance sheet amid billions of dollars in litigation costs, fewer opportunities to boost profit and tougher regulations that followed the financial crisis.
“There must have been some kind of strain between Brian and Bruce for him to step down at age 50,” Charles Peabody, an analyst at Portales Partners, said in a phone interview. “You’ve had five years of declining revenues, and Brian is undoubtedly feeling the heat to grow this thing.”
Moynihan and Thompson didn’t respond to messages seeking comment. A company spokesman declined to comment.
The timing of the change surprised Peabody, coming a week after second-quarter results gave investors and analysts hope the U.S. bank most beset by the financial crisis had turned a corner. The Charlotte, North Carolina-based lender boosted revenue while shaving expenses and avoiding major costs from legal claims.
In a memo to staff, Moynihan went to lengths to credit Thompson for improving the firm’s capital levels amid the post- crisis turmoil. Bank of America paid more than $70 billion to settle disputes, mostly tied to the 2008 acquisition of subprime lender Countrywide Financial Corp.
“No finance executive in the world in the past decade has contended with greater challenges and discharged his responsibilities with as much skill and grit as Bruce Thompson,” Moynihan, 55, said in the memo. More broadly, he said, “there have been some challenging bends in the road on which we have traveled.”
Bank of America suffered a series of missteps in recent years tied to the Federal Reserve’s stress tests to prove banks can weather another crisis. Last year, the firm made a $4 billion miscalculation that forced it to scuttle share buybacks. In March this year, regulators let it repurchase stock on the condition executives resubmit models and improve internal controls by September. Donofrio takes over Aug. 1.