10 July, 2020

Bank of America shareholders back board despite criticism

NEW YORK (Reuters) – Shareholders voted to back Bank of America Corp’s (BAC.N) executive compensation, board nominations and opposition to shareholder proposals at the annual meeting on Wednesday, despite earlier complaints about bylaws being changed.

The company summarized the results, saying all directors had been elected, but did not say by how much. It will release the final vote tallies within four days.

Lead independent director Jack Bovender said shareholders he talked to in recent weeks had been right to fault the board for changing company bylaws in October to allow Chief Executive Officer Brian Moynihan to also become chairman.

The company said on Monday it will hold another vote on the combined roles no later than next year’s meeting.

Disclosure of Wednesday’s shareholder votes could show how much the standing of the directors was hurt when they changed the bylaws.

Shareholder advisory firms Institutional Shareholder Services Inc and Glass Lewis & Co had said investors should vote against re-electing director Thomas May because he headed the governance committee that pushed for the bylaw change. ISS also recommended votes against three other members of that committee, Sharon Allen, Frank Bramble and Lionel Nowell.

The action in October overrode a vote by shareholders during the financial crisis in 2009 that called on the board to separate the roles, then both held by Ken Lewis. The board named an independent director to be chairman.

Bovender said the October decision made sense at the time because the then chairman was retiring and Moynihan had done a good job.

However, Bovender added that, after spending “a lot” of the last two or three weeks on the telephone with investors, he realized they were right to fault the board for acting on its own.

Bovender said Moynihan called him late last week and recommended the company commit to a shareholder vote on the change.

Shareholders also turned down a call for a special board committee to consider breaking up the corporation because it is too big to manage and too big for the safety of the financial system.

The split-up proposal, made by Bart Naylor of the non-profit advocacy group Public Citizen, was included on the ballot after a ruling by the U.S. Securities and Exchange Commission in March.

Moynihan said the company should be big to serve its multi-national corporate customers. The company’s businesses make more money because they refer one another’s products to clients, he added.