Bank of America shareholders learned Thursday that the bank will not hold a vote at its May 6 annual meeting on its move last fall to hand its CEO the chairman title.
The Charlotte bank’s annual proxy filing does not include any proposals from the bank’s management or shareholders on the lender’s combination of the two roles in October.
Several large investors had pushed for the bank to let shareholders vote on the bank’s decision to roll back a bylaw change approved by shareholders in 2009 to split the roles. But these shareholders later backed off a request for a vote.
In the proxy filing, Bank of America strongly defended its decision to give CEO Brian Moynihan the extra title, saying it was based on a “well-researched” review and months of “thorough deliberation.”
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Charles Elson, director of the John L. Weinberg Center for Corporate Governance at the University of Delaware, on Thursday called the bank’s decision not to hold a vote disappointing. Supporters of keeping the positions separate argue that it provides an independent check on management.
“The shareholders told you to make the split,” he said. “It’s like the voters approving a referendum and the legislature reversing it.”
Although the issue won’t be on the ballot, it’s still possible shareholders will speak on the issue at the stockholder meeting, which will be at the Charlotte Marriott SouthPark. That’s a change from its usual venue in uptown Charlotte, where the bank’s meeting has drawn scores of protesters over the years.
Shareholders will get to vote on a number of other proposals, including a measure that asks the bank to examine ways to break itself up. The Observer reported last week that the bank’s attempt to block the proposal had been nixed by the Securities and Exchange Commission.
Bank of America, which opposes the proposal, says it has already reduced its size since 2010, trimming billions of dollars in assets and eliminating dozens of noncore businesses.
Bank defends move
To give Moynihan the chairman position, the bank’s board amended company bylaws.
The role had been held by nonmanagement directors since Moynihan’s predecessor, Ken Lewis, was stripped of the title in 2009 after he came under shareholder fire for the bank’s purchase of Merrill Lynch.
In Thursday’s filing, the bank said its board decided to grant Moynihan the title after careful consideration, particularly “in view of the 2009 stockholder vote” in which 50.3 percent of shareholders who voted were in support of splitting the roles.
The 2009 vote reflected shareholder concerns at a specific time, when the bank was “in the midst of the financial crisis,” the bank noted.
Since then, the bank “has evolved significantly,” it said, pointing to, among other things, the lender’s simplifying of its operations and settling most of its major mortgage-related litigation.
The bank also noted that it created a lead independent director position in October.
New York City Comptroller Scott Stringer, the investment adviser to New York City’s pension funds, had pushed for the bank to allow a shareholder vote on the chairman issue.
But last week, Stringer’s office said the comptroller was no longer seeking a binding shareholder vote, after the bank announced a change allowing certain shareholders to nominate members for the bank’s board.
In a statement Thursday, Eric Sumberg, spokesman for Stringer, said the nomination process change is “hugely significant.” The comptroller still would like to see an independent chair at the bank, and Stringer’s office “will continue to engage the company on this issue,” Sumberg said.
Another big investor that had pushed for a separate chairman was the California State Teachers’ Retirement System, which on Thursday also praised the bank’s decision allowing shareholders to nominate directors.
“We think the move ... does put in a mechanism of great accountability for the board,” said Aesha Mastagni, an investment officer at the pension fund.
“That being said, CalSTRS has not changed its position on the fact that we believe the chairman and CEO role should be separate.”
How much did Brian Moynihan make in 2014?
As has happened before, Bank of America CEO Brian Moynihan made less than Chief Operating Officer Tom Montag in 2014.
According to Thursday’s proxy, here’s what top executives made in salary, cash bonuses and stock awards, compared with a year earlier. Moynihan did not receive a cash bonus for either year. Some pay details were reported earlier this year.
▪ Moynihan, CEO, $13 million (down 7 percent).
▪ Bruce Thompson, chief financial officer, $10.75 million (down 10 percent).
▪ David Darnell, head of wealth and investment management, $8.75 million (down 13 percent).
▪ Gary Lynch, general counsel, $8.15 million (down 9 percent).
▪ Montag, COO, $14 million (down 10 percent). Deon Roberts