Banking

Labor group urges BofA shareholders to split chairman-CEO roles

Bank of American chairman and CEO Brian Moynihan
Bank of American chairman and CEO Brian Moynihan Bloomberg

Bank of America shareholders should force Chief Executive Officer Brian Moynihan to give up his chairman title, says a group that advocates for pension funds affiliated with labor unions.

The bank is holding a Sept. 22 vote to approve bylaw changes that allowed Moynihan to add the chairman title last year. The Charlotte-based lender took a “big step backwards” when it replaced its independent chairman with a lead director, CtW Investment Group said in a letter posted on its website Friday.

“Bank of America’s decision to unilaterally amend the bylaw, apparently after a ‘thorough and thoughtful process,’ displays a shocking lack of awareness,” CtW said in the letter. “Eliminating the independent chairman’s role raises unnecessary risks for shareholders without demonstrable benefits.”

Lawrence Grayson, a spokesman for Bank of America, declined to comment. Proxy advisers Institutional Shareholder Services Inc. and Glass Lewis & Co. probably will wait until early September to issue their recommendations.

In a filing this month, the bank’s board praised Moynihan’s leadership and recommended investors ratify the bylaw change. Still, the lender has said it will “promptly implement” a plan to find an independent chairman if a majority oppose the decision that gave Moynihan both top jobs.

CtW advocates for union-affiliated pension funds that collectively manage more than $200 billion, according to its website. The firm was involved in the 2009 shareholder amendment that mandated an independent chairman at Bank of America, the second-largest U.S. lender.

The Wall Street Journal reported CtW’s letter earlier Friday.

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