Bank of America Breaks the TARP Leash But Can They Find a CEO?
Duh, obvious. Let's play Hose the Shareholders! (Bank of America is awesome at this in case you don't know)
Bank of America Corp., the nation’s biggest lender, will repay $45 billion of U.S. government bailout funds, helping free the bank from curbs on executive pay that have hampered its search for a new leader.
The bank will repay the Troubled Asset Relief Program using $26.2 billion of “excess liquidity” and $18.8 billion from the sale of securities, according to a statement. The firm plans to increase equity by $4 billion through asset sales, and will issue $1.7 billion of restricted stock instead of year-end bonuses to some employees.
Bank of America’s two rounds of U.S. funding included $20 billion to help cushion losses tied to the takeover of Merrill Lynch & Co. The planned repayment will ease the bank’s effort to replace Chief Executive Officer Kenneth D. Lewis, who announced his departure in September.
Dilution for shareholders will be “substantial,” said William Fitzpatrick, an analyst at Racine, Wisconsin-based Optique Capital Management, which oversees $1 billion, including Bank of America shares. “It looks like this was done for the incoming chief executive,” he said. “You take out the compensation restrictions and everything else that went along with the government ownership.”
Actually if you're still a Bank of America shareholder, you probably get everything you have coming. So fuck it, good for them.