Bank of America CEO Brian Moynihan sent two division presidents home packing in a major reorganization.  Sallie Krawcheck, the president of global wealth and investment management, and Joe Price, the president of consumer and small business banking were told to leave. 

As part of the changes, David Darnell and Tom Montag were named co-COO's and will report directly to the CEO Brian Moynihan.  Mr. Montag will oversee the banking and markets activities of the company, including Bank of America Merrill Lynch, which he headed previously.  Mr. Darnell, now head of global commercial banking, will run all of the bank’s consumer businesses, including wealth management and home loans.

The reorganization comes just days before executives are to review proposals for Project New BAC, an internal initiative aimed at making the company more nimble.  As part of that effort, the company is expected to cut 10% of the overall workforce, according to a person with a knowledge of the matter.   The cost savings in eliminating the jobs of Ms. Krawcheck and Mr. Price are potentially substantial, said a senior executive close to Ms. Krawcheck.

The shake-up also marks the 2nd time this year that Mr. Moynihan has reshuffled his management team. He named a new chief risk officer Bruce Thompson to replace Charles Noski, who left to tend to “a serious illness of a close family member.” Gary Lynch of Morgan Stanely was tapped to become the global chief of legal, compliance and regulatory relations, a newly created position.

Mr. Price’s departure closes the book on a long career at Bank of America, which he joined in 1992 from PriceWaterhouse. He is no stranger to shakeups at the bank, having shifted roles on multiple occasions, moving from auditor general to risk manager. His most recent move came in early 2010, when Mr. Moynihan tasked him with overseeing the consumer bank after a stint as chief financial officer.

A top executive at Sanford Bernstein and Citigroup, Ms. Krawcheck was hired in August 2009 by Mr. Lewis, the company’s former and somewhat controversial chairman and chief.

Since her arrival, the wealth management group has posted steady results under her stewardship, even while the broader has been battered by billions of dollars in losses. In the second quarter of the year, the division earned $506 million, down slightly from the prior period but up from $329 million in the second quarter of 2010.

In particular, the Merrill Lynch brokerage force has been a surprising bright spot for the beleaguered bank, as the unit has ramped up its client base since its 2009 takeover by Bank of America. In a report earlier this year Michael Mayo, an analyst at Crédit Agricole Securities, said he expected the growth to continue.

Ms. Krawcheck has been a well known figure on Wall Street for decades and among the small cadre of top women executives in finance. After college the University of North Carolina at Chapel Hill, she moved to New York, landing a job as an investment banker at Salomon Brothers and switching after a few years to Donaldson, Lufkin & Jenrette.

Later Ms. Krawcheck was hired at Sanford Bernstein, where she distinguished herself as a stock analyst, covering securities companies. At the time she made headlines with some of her bold calls, notably upsetting well-known Wall Street executive Sandford Weill when she made negative comments on the acquisition of Salomon by his firm Travelers Group.She became Bernstein’s chairman and chief executive not long after Alliance Capital Management purchased the firm in 2000.

Amid scandals over Wall Street research, she became head of research and brokerage at Citigroup in 2002, a move to restore credibility in the division. She eventually rose through the ranks, becoming chief financial officer at Citigroup and then head of its wealth-management division. But she left the bank in September 2008 after clashing with top executives over whether to reimburse clients who lost money on Citigroup hedge funds.

Mr. Moynihan in a statement praised the efforts of Ms. Krawcheck and Mr. Price at Bank of America, saying “de-layering and simplifying at the scale in which we operate requires difficult decisions.” “We wish them well and look forward to their continued leadership and business successes in the future.”

[DealBook, 9/6/11]