Security Pacific staff feeling dwarfed in 'merger of equals': majority of appointments going to BofA employees.

Despite being billed as "a merger of equals," the vast majority of the top positions of the new BankAmerica are being awarded to current Bank of America executives and not Security Pacific bankers, according to a review of internal documents obtained by the Business Journal.

Since September, the two banks, which are expected to complete the merger in late April, have been issuing weekly newsletters to employees, outlining the top management positions for the post-merger banking institution.

In 17 internal employee communications obtained by the Business Journal, 363 appointments were made and 267 of those, or 73 percent, have been awarded to Bank of America employees. Only 96 of the appointments, or 27 percent, went to Security Pacific employees.

When appointments to manage the Financial Services System -- a Security Pacific division of non-bank services in which there is no counterpart at BofA -- are taken out of the mix, the share of jobs going to Security Pacific executives drops to 23 percent.

Meanwhile, the mood at Security Pacific headquarters in downtown Los Angeles is bleak, according to employees there, as many await word on when they will be terminated so they can take their severance packages and leave.

"There is a real malaise," said one executive who asked not to be identified for fear of losing a severance package. "Some people are still doing business. But for the most part, nobody will move because of the merger. They're all like lying ducks because they know they don't have a job."

Security Pacific officials declined to comment on the appointments or the atmosphere at Los Angeles County's largest bank.

Charlie Coleman, spokesman for San Francisco-based Bank of America, declined to confirm or deny whether the majority of posts were going to current Bank of America staff. "The merger is not final and to be keeping a scorecard at this point is premature," he said.

Coleman noted that Richard Rosenberg, BankAmerica Corp. chairman, has repeatedly stated that this would be a "merger of equals," and not a takeover by Bank of America. Rosenberg has also repeatedly stated that the best people will be picked for available jobs, regardless of whether they are currently working at BofA or Security Pacific.

Coleman noted that the make-up of the new bank's board of directors and top level of management is about equally divided between current Security Pacific and Bank of America officials.

But in recent months the majority of appointments has been going to BofA and not Security Pacific bankers, according to internal sources and employee newsletters. For example, in the Feb. 20 employee communication, it was announced that 13 jobs went to BofA executives and two to Security Pacific executives. In the Jan. 28 newsletter, 12 jobs went to BofA and three to Security Pacific.

Although Bank of America is not keeping a count, employees at Security Pacific are -- and resentment is reportedly building.

One Security Pacific executive who asked not to be named said, "Every Monday when the newsletter comes out, we add them up. We say, 'This week it is 14 to three.' . . . Certainly there isn't any balance."

In a recent interview in the Los Angeles Times, BofA Chairman Rosenberg is quoted as saying the merger has "clearly created more anxiety in the Security Pacific organization that at BofA."

Since the new corporation decided to primarily use Bank of America computer systems, people who work with Bank of America computers "have a leg up" to be chosen for new positions over managers of computer systems at Security Pacific, Rosenberg said.

In addition, since many of the jobs are concentrated in San Francisco, many people are anxious about the prospect of moving, he said.

Many Security Pacific employees in Los Angeles have flown to San Francisco for job interviews, sources told the Business Journal. Typically, three or four Security Pacific managers and three or four Bank of America executives are interviewed for a position, sources report.

"We have heard of ridiculous things like a certain person was selected (for the position) a month ago and then they go through the interview process," said one high-level bank executive. "It's a sham."

But another executive said that the situation is something to be expected in a takeover situation. Many people are bitter, but especially those who were recently hired by Security Pacific, the senior vice president said. Some employees are looking forward to getting termination notices and severance packages because they no longer want to be a part of the bank's organization, the senior vice president said.

Bankers understand what happens in a takeover, one high-placed banker said.

"What people are upset about is no one is straightforward about it," he said. "In fact, the representation is just the opposite."

Low- and middle-level Security Pacific executives are also upset because they do not believe Security Pacific's very top executives -- the Managing Committee -- are advocating Security Pacific employees for new positions.

In particular, sources said, Security Pacific executives are angry with Robert Smith, current chairman and chief executive officer of Security Pacific, who will become president and chief operating officer of the new BankAmerica Corp.

Smith is the butt of most jokes in an underground employee newsletter being circulated at Security Pacific which ridicules the merger updates reported in company newsletters.

One Security Pacific executive lamented that his bank is being completely dismantled. Until four or five years ago Security Pacific's management was highly regarded; in fact, it was more highly regarded than that of Bank of America, he said.

"Surely, there must be some people around who contributed to those years of success," who could be chosen to help lead the new bank, the executive said.