Bank of America announced Thursday the retirement of board member Chad Gifford, known for strong past allegiance to CEO Brian Moynihan and one of the longest-serving members of the bank’s board.
Gifford, 73, became a director for the Charlotte-based bank in 2004, after Bank of America bought Boston-based FleetBoston Financial, where Gifford was CEO at the time. Thomas May, a former Fleet director, is the only other Bank of America board member who has served as long.
Thursday’s disclosure was made in the bank’s annual proxy filing, which also included executive compensation details. Moynihan made $16 million in total compensation for his work in 2015, which the bank previously disclosed in February.
Gifford’s departure doesn’t go far enough to appease some Bank of America investors who have been calling for new blood on the board. Such calls have been fueled in part by the bank’s surprise decision in 2014 to name Moynihan chairman by unraveling a 2009 binding shareholder resolution to split the chairman and CEO roles.
Bank of America said Thursday that all 12 remaining board members, including Moynihan, are up for re-election.
“It’s not nearly enough (change),” said Michael Pryce-Jones, corporate governance director at CtW Investment Group, which advocates for labor union pension funds that own Bank of America shares.
Pryce-Jones, who was angered by the 2014 chairman decision, argues that forcing out some board members could help restore the board’s credibility with shareholders.
“It's very hard for other board members to ask those tough questions ... ‘Should you be leaving early?’” he said. “I don’t think Bank of America’s really bitten the bullet on that.”
Bank of America declined to comment. But in its proxy filing the bank noted that its directors have an average tenure of 5.4 years, below the 8.5-year average for S&P 500 companies. The bank has also noted that it has had eight new independent director nominees since 2012.
But in a sign shareholders were upset with the way the bank’s board combined the CEO and chairman roles, May was re-elected last year with just 66.7 percent of shares voted.
May, who chairs Bank of America’s corporate governance committee, had received 98 percent of shares voted in 2014. The bank’s other 12 director nominees were also all re-elected last year.
Successor from Canadian bank
To replace Gifford, the bank said it has picked Thomas Woods, a 63-year-old former executive for Toronto-based Canadian Imperial Bank of Commerce.
On April 27, Bank of America shareholders will vote on his nomination and the re-election of the board’s other members at the bank’s annual shareholders meeting at Hilton Charlotte Center City.
Bank of America said Woods was identified by a third-party search firm. His roles at the Canadian bank have included chief financial officer and chief risk officer.
Gifford’s retirement, effective at the annual shareholder meeting, means May and Moynihan are the only remaining directors with ties to Fleet, where Moynihan worked until joining Bank of America in the 2004 deal.
Gifford helped keep Moynihan at the bank when former CEO Ken Lewis planned to let him go in 2008. After Lewis’ departure, Gifford also was on the six-member committee that led a CEO search that ultimately resulted in Moynihan’s appointment.
Gifford served as chairman of Bank of America from 2004 to 2005.
In 2015, he was given $607,710 in compensation, the highest among the bank’s non-management directors. The category does not include Moynihan, who is not paid for his service on the board.
Gifford is also the only director, besides Moynihan, not considered independent because of certain perks Gifford receives, including office space.
When it nominated Gifford for re-election last year, the bank noted its guidelines don’t allow a director 72 or older to be nominated for initial election to its board. But it noted that the board is permitted to nominate someone for re-election once they’ve hit the age cap – if, in light of the circumstances, it is in the best interests of the bank and its stockholders.
In Thursday’s filing, Moynihan praised Gifford’s work, saying the company “greatly benefited from his judgment and experience.”
But Gifford has also faced criticism in the past from some investors upset by the bank’s 2009 purchase of Merrill Lynch.
That following year, a Houston investment firm filed a motion urging shareholders to vote against Gifford, who the investment firm said rubber-stamped the decision to buy Merrill even though he had private concerns about it.
Other highlights from Thursday’s filing:
▪ For the first time, Moynihan’s compensation exceeds that of Chief Operating Officer Tom Montag. Montag, whose roles include managing the bank’s trading businesses, has made more than Moynihan since he became CEO in 2010.
For his work in 2015, Montag received $15.5 million.
▪ Bank of America investors are expected to vote on only one proposal from a shareholder during next month’s meeting. That proposal calls for the bank’s top executives to have a portion of their annual total compensation deferred to cover future legal fines.
Bank of America has recommended shareholders vote against the proposal, arguing among other things that such a policy would inhibit the bank’s ability to attract and retain talented executives.
A different shareholder had unsuccessfully pushed for investors to vote next month on having the bank examine the idea of breaking itself up. The Securities and Exchange Commission this month denied an appeal by the shareholder after the bank decided to omit the proposal.
▪ Thursday’s filing also shows Bank of America made a $1 million donation to Wake Forest University to endow a chair in business ethics and culture, in honor of retiring senior executive David Darnell.
The Winston-Salem school said the money creates the David C. Darnell Presidential Chair in Principled Leadership, named after the 1975 Wake Forest graduate.