Investors and activists hounded Bank of America Corp. during its annual meeting Wednesday over everything from its environmental practices to its role in the mortgage meltdown.
Inside the two-hour meeting at 1 Bank of America Center uptown, shareholders questioned chief executive Brian Moynihan’s leadership as the Charlotte lender battles back from a devastating financial crisis. Outside, an estimated 500 to 750 protesters blocked the streets in a demonstration that led to six arrests.
“Listen to what’s around you,” one shareholder told Moynihan. “This is America. Bank of America, take care of America.”
“I listen carefully,” he answered.
The protests reflect the pressure Moynihan faces in his third year as CEO as he seeks to rebuild profits, slog through lingering mortgage troubles and restore shareholder value at the nation’s second-largest lender by assets.
They also highlight a divide within the ranks of investors: Despite the outcry, shareholders passed all three of the bank’s management proposals, including the “say on pay,” and voted down all six stockholder proposals, keeping with the board’s recommendations.
Still, critics were more vocal this year than in the past, a sign of continued anger at big banks amid an unsteady economy. Demonstrations started with the morning rush hour, with protesters marching from three directions toward the meeting site on North College Street. They flooded the intersection of Fifth and College streets while dozens of police officers watched.
Billed by organizers Unity Alliance and 99% Power as the “Showdown in Charlotte,” the display targeted Bank of America’s foreclosure policies and financing of the coal industry. The crowd was smaller than the 1,000 that organizers expected, but still turned tense at times.
Police made their first arrests after several protesters tried to enter the shareholders meeting, for instance.
Other activities outside included drumming, a mock boxing match between “Miss 99% Power” and a man posing as Moynihan, and chants of “Whose city? Our city!”
The meeting was packed to capacity, too. Some shareholders who showed up as it began were turned away, a bank spokesman said.
But inside, bank officials tried to set a calmer tone. The auditorium in the sleek office tower was quiet in the minutes before the meeting, with classical music piping through the speakers. Shareholders who wanted to ask questions were given two minutes, enforced by a timer blinking on flat-screen televisions and a bell that chimed when time was up.
“We all have a job to do today,” Moynihan said as the meeting began, from a stage at the front of the auditorium. “We need to get through an orderly meeting.”
Almost immediately, though, critics began chiding the bank and its leaders. Shareholder activist John Moore told the CEO the bank wouldn’t be there without the taxpayers who bailed it out after the 2008 financial crisis, adding, “I want you to think about what it’s been like to hold this stock for 15 years.”
Another shareholder cited the bank’s long list of legal troubles, largely stemming from its purchase of troubled mortgage lender Countrywide Financial Corp. in 2008.
“What is it going to take for Bank of America to start abiding by the law ... and righting the many wrongs it has done, short of a lawsuit?” he asked, drawing applause from some attendees.
“We abide by the law every day,” Moynihan said. “We continue to clean up companies we didn’t own when they did that.”
‘I don’t feel threatened’
Moynihan offered terse responses to most shareholders’ comments, which sometimes fueled more criticism. After a short answer to what the bank is doing to resolve its mortgage woes, one investor asked for “a little bit more thoughtful response.”
Another shareholder, annoyed by the rigorous security outside the meeting, asked, “Did you ever think that if perhaps you were a better corporate neighbor, you wouldn’t be so scared?”
The security was meant to protect shareholders, Moynihan said, adding, “I don’t feel threatened at all.”
Activists aside, the bank made little news at its shareholders meeting. Investors passed all three of the bank’s management proposals, including re-electing 12 directors and approving executives’ compensation, including Moynihan’s $7 million pay package for his 2011 work. Citigroup Inc. shareholders last month voted against hefty pay packages for CEO Vikram Pandit and others in their own nonbinding “say-on-pay” vote, fueling questions about whether a similar pushback was possible for Bank of America.
But 92 percent of shareholders voted in favor of the executive pay, according to the preliminary results disclosed Wednesday.
Shareholders also voted down all six stockholder proposals by wide margins. One of those, which called for an independent review of the bank’s internal controls related to residential mortgage modifications, foreclosures and securitizations, seemed to draw heavy support from the crowd Wednesday. But just 14 percent of shareholders voted in favor of it, the bank said.
Bank’s charity work cited
Some bank supporters spoke in the lender’s defense. United Way Executive Director Jane McIntyre, a shareholder since the 1980s, told the crowd the company has long stepped up to help nonprofits locally and around the country – “another side” to the story, she said.
Moynihan was quick to defend his leadership and his bank’s practices, too. But he also promised to continue helping homeowners.
“I pledge it to you,” he told one shareholder who complained that despite making his payments, he was underwater and needed help. “... It’s not to hit a home run. It’s to do the right thing.”
When others complained that the bank’s mortgage servicing process was broken, with long delays and other glitches facing homeowners, Moynihan said he would make sure they got help.
Meanwhile, he emphasized that the bank has modified 1 million mortgages: “We spend every day, 50,000 associates, working hard to make this happen,” he said. “Those are the facts.”
The bank this week began mailing letters to more than 200,000 homeowners offering principal reductions, part of the $25 billion mortgage settlement announced in February.
Bank of America has made significant progress in recent months building capital, focusing on clients and streamlining operations under the wide-ranging efficiency initiative Project New BAC, Moynihan said.
But the unrest that accompanied this year’s meeting is the latest signal of the trouble still facing the bank. Bank of America’s stock fell 58 percent in 2011 before bouncing back this year, but it remains well below the level of better times. Shares closed at $7.73 Wednesday, down slightly from the previous day’s close.
The CEO told the crowd that 2012 will be about building on a strong foundation and striving for better returns. He didn’t commit to asking regulators for permission to increase the bank’s penny-per-share quarterly dividend in the near future. But he said executives would continue to look at the issue and begin paying shareholders “as soon as it’s the right thing to do.”
That wasn’t enough for some critics. Miffed they didn’t get a chance to speak before Moynihan adjourned the meeting, some stood and shouted.
As attendees filed out, a group began chanting, “Bank of America, bad for America,” before filtering outside. Staff writers Ely Portillo and Cleve R. Wootson Jr. contributed.
