In a mostly fireworks-free meeting that stretched a little more than an hour, Bank of America shareholders on Wednesday approved the Charlotte bank’s slate of directors and rejected a proposal to require a separate chairman and CEO.
Brian Moynihan, CEO since 2010, presided over the gathering at the Hilton Center City in Charlotte just a week after the company posted solid first-quarter earnings of $4.9 billion, a 40 percent jump from a year ago. The profits of the second-largest U.S. bank have been on the rise as it cuts costs, including legal expenses from the financial crisis.
“This is a very strong and great company,” Moynihan said, repeatedly saying he’s committed to growing the company in a responsible manner.
Unlike rival Wells Fargo’s shareholder meeting Tuesday, the gathering offered little drama in a sign that Bank of America continues to move past the criticism – and protests – it drew during the crisis. One shareholder Wednesday even thanked Moynihan for his work “healing” the bank.
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The proposal for an independent chairman revived a debate that erupted in October 2014 when the bank’s board nixed a bylaw that would have separated the chairman and CEO roles. Eleven months later, shareholders approved a measure allowing Moynihan to keep both titles.
Wednesday’s proposal, which received 33 percent of the vote, would have required the bank to have a separate chair “whenever possible” and would not have applied to Moynihan. Two major advisory firms – Institutional Shareholders Services and Glass Lewis – had backed the measure, arguing it was good corporate governance.
In the bank’s proxy filing, the board had urged a “no” vote, saying it should be allowed to determine the “most effective” leadership structure. Bank of America has a lead independent director, Jack Bovender Jr., who handles some of the same responsibilities as a chairman.
Among the 14 directors, 13 received between 97 percent and 99 percent of the vote. Arnold Donald, the CEO of the Carnival cruise company, received the lowest support, 90 percent. Glass Lewis had opposed his election because he serves on a total of three boards, which it deemed too many.
Directors, who run unopposed, typically tally 95 percent or more of the vote in board elections, although some Wells Fargo board members barely surpassed 50 percent on Tuesday amid fallout over the bank’s unauthorized accounts scandal.
Bank of America continues to look for ways to wring costs out of the company, including through reducing its real estate footprint and digitizing processes, Moynihan said. An ongoing project called “Simplify and Improve” is designed to make the company more efficient. Such efforts have led to job cuts in Charlotte and elsewhere.
“It’s not magical,” the CEO said about efforts to lower costs. “It’s just hard work.”
In the most tense moment Wednesday, shareholder and long-time critic Richard Davet highlighted a recent $46 million mortgage-related court ruling in which a judge accused Bank of America of a Watergate-style cover-up. Davet said the bank should not be pursuing an appeal in the case, which the judge said caused “battle-fatigued demoralization” for a couple fighting foreclosure.
Moynihan also heard from multiple shareholders who want to see a hike in the bank’s dividend, now at 7.5 cents per quarter after a sharp drop amid the financial crisis. One shareholder said he used to make $100,000 per year from his bank payout. Now it’s down to $14,000.
Moynihan, who referenced the dividend nine times in this annual letter to shareholders this year, was sympathetic. But he noted any dividend increase is subject to Federal Reserve review as part of annual stress tests. Those results are due in late June. Moynihan wouldn’t offer any clues Wednesday on the bank’s dividend plans.