Bank of America Corp. shareholders should oppose a proposal allowing Chief Executive Officer Brian Moynihan to remain chairman, proxy adviser Institutional Shareholder Services said in a report to investors.
“The board’s suggestion that the independent chairman requirement is no longer needed given that the company’s circumstances have changed since 2009 is unconvincing,” ISS said in the report obtained Friday by Bloomberg.
“While the near-term viability of BAC is no longer in question, its performance and governance continue to raise concerns,” the proxy adviser wrote, referring to the bank’s ticker symbol.
Moynihan, 55, became chairman in October after the Charlotte lender amended shareholder-backed bylaws created in 2009 that require an independent chairman. The bank’s investors are scheduled to vote Sept. 22 in Charlotte on a proposal that would ratify that change.
Glass Lewis & Co., another proxy adviser, said earlier this week that it also opposes the bylaw change.
“The board is asking for the same flexibility that 97 percent of the S&P 500 already have in determining their leadership structure,” Bank of America spokesman Lawrence Grayson said in a statement. “The board recognizes and respects that some have a fixed view on board leadership structure and others hold differing views, which is why the board committed to putting it to a vote.”
Bank of America has previously pointed out that the 2009 vote to split the chairman and CEO roles was “very close,” with 50.3 percent in favor. The bank has also noted that the vote took place during a different era, when the bank had just purchased Countrywide Financial Corp. and Merrill Lynch, deals that shareholders questioned.
Moynihan was asked about the issue during a talk he gave Wednesday night at Christ Church Charlotte.
“We basically are going to ask the shareholders to confirm the board’s flexibility to have a chairman/CEO structure,” Moynihan said. “Of the S&P 500, 97 percent of the companies have (that) flexibility,” but that doesn’t mean all of them have a CEO who is also chairman, he said.
Staff Writer Deon Roberts contributed.