UPDATE 2-Bank of America CEO Lewis to skip '08 bonus

(Recasts with confirmation of email; adds detail)

NEW YORK, Jan 6 (Reuters) - Kenneth Lewis, chief executive at Bank of America Corp's, (BAC.N: Quote, Profile, Research) has recommended that his board of directors not pay him a bonus for 2008, a difficult year for the largest bank in the United States.

Lewis sent the eight employees directly underneath him an email that said the decision was difficult, but that "we are a pay for performance company," the Charlotte Observer reported.

A Bank of America spokesman confirmed the contents of the email.

Chief executives of five of the six largest U.S. banks are not receiving bonuses now, after heavy losses for the industry, plunging share prices and government rescues. The CEO not forgoing a bonus as yet is Wells Fargo & Co's (WFC.N: Quote, Profile, Research) John Stumpf.

Bank of America bought Countrywide Financial Corp CFC.N last year and closed on its purchase of Merrill Lynch & Co Inc MER.N on Jan. 1.

"(W)e have worked hard and made progress on many projects that will create value for our company in future years," Lewis wrote in his email, according to the Observer. That hard work made the decision to forgo a bonus difficult, the email said.

But the company's net income fell 60 percent in the first nine months of 2008 from the same period in 2007, and its shares fell 66 percent last year. Many analysts have said Bank of America may need more capital as the economic downturn hits areas including credit card loans, auto loans, and commercial property values.

Lewis received about $20.4 million of compensation in 2007, an 11 percent decline from the prior year.