Weill Withdraws Bid to Replace Armacost as Chief Executive of BankAmerica Corp

By Luke, Robert; Carroll, Mike | American Banker, March 5, 1986 | Go to article overview

Weill Withdraws Bid to Replace Armacost as Chief Executive of BankAmerica Corp


Luke, Robert, Carroll, Mike, American Banker


Weill Withdraws Bid to Replace Armacost As Chief Executive of BankAmerica Corp.

Rebuffed by BankAmerica Corp.'s board of directors for the second time in as many months, financier Sanford I. Weill on Tuesday withdrew his bid to become chief executive officer of the nation's second largest banking company.

Meanwhile, BankAmerica also shuffled its senior management, naming Thomas W. Cooper, 49, to the new post of president and chief operating officer of its chief subsidiary, Bank of America, a move that relieves BankAmerica president and chief executive officer Samuel H. Armacost of day-to-day responsibility for managing the bank.

In addition to his title as chief executive of the bank, Mr. Armacost was named chairman of the bank, a new post for him.

Mr. Weill had proposed raising a $1 billion in new capital for the bank if the board would install him as chief executive in Mr. Armacost's place. Mr. Weill alluded to a plan of changes in management and organization at the bank, which lost $337 million in 1985. But the details were never made clear either to the public or to the bank's board, which rejected Mr. Weill's offer in its Monday board meeting in Los Angeles.

"It has been my intent that my proposal to BankAmerica be a friendly one," Mr. Weill said in a statement. "In view of yesterday's announcement by the bank to pursue their own plan for the future, I am withdrawing my offering, and therefore I release Shearson Lehman Brothers Inc. from its commitment to raise $1 billion in equity capital."

On word of Mr. Weill's decision, BankAmerica stock dropped steeply Tuesday, closing at 15-1/2 down 7/8 on heavy volume.

Mr. Weill, the former American Express Co. president who built Shearson into a Wall Street powerhouse, was backed by his former firm in his effort to unseat Mr. Armacost.

Sources said that they doubted the financier would send his extensive plan for changes to the bank now that his challenge had been withdrawn. They said his plan had been backed by a letter from an insurer offering to reestablish directors and officers' liability insurance if Mr. Weill made chief executive. Last spring, the bank lost its outside policy and has been self-insuring its officers and directors since. The identity of the insurer mentioned in the letter could not be established.

Mr. Armacost's strength among board members was highlighted in striking fashion Monday afternoon when management was asked to leave the boardroom so that outside directors could consider Mr. Weill's plan. Often having to leave a boardroom is a foreshadowing of doom for a company's managers.

However, Mr. Armacost pulled a trump card in having John H. Gutfreund, chief executive officer of Salomon Brothers Inc., brief the board on teh Weill plan. Arguably the most powerful man in the nation's capital markets, Mr. Gutfreund reportedly told board members that there was no need to raise a capital now, and that his firm stood ready to raise any money, with no strings attached, should an opportune time arise.

In installing Mr. Cooper in the newly created position at the bank, BankAmerica's board of directors left Mr. Armacost as president and chief executive officer firmly in charge of the company, but removed him from the day-to-day management of the company's principal subsidiary, Bank of America.

Mr. Cooper joined Bank of America in March last year, coming from Mellon Bank Corp., where he had been vice chairman in charge of the retail and middle-market activities of subsidiaries. He had been president of Girard Co. prior to its acquisition in 1983 by Melllon. And, according to sources, he has earned a reputation as an effective cost cutter. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Weill Withdraws Bid to Replace Armacost as Chief Executive of BankAmerica Corp
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.