Reuters/Lucy Nicholson Big win for Bank of America. See Also Bank of America’s day of reckoning is here One of the biggest pension funds in the US is going after Bank of America CEO Brian Moynihan Bank of America is so desperate to win a potentially embarrassing vote that it’s lobbying tiny shareholders It looks like Bank of America CEO Brian Moynihan gets to keep his “chairman” title.
It looks like Bank of America CEO Brian Moynihan gets to keep his “chairman” title.
Shareholders made the decision on Tuesday in a Charlotte, North Carolina, vote.
According to preliminary results, 63% of voters were in favor.
Why were shareholders voting on Moynihan’s position?
Last October, the bank moved to consolidate executive leadership by handing the CEO the additional title of chairman of the board.
The problem? They did not consult shareholders first.
They also undid a 2009 shareholder vote to split the roles.
It rankled shareholders, stock analysts, and corporate-governance specialists.
Tuesday’s vote follows months of speculation and campaigning on both sides.
As Business Insider reported on Friday, Bank of America had been lobbying shareholders who own as few as 500 shares in the hopes of winning their votes.
CSLA bank analyst Mike Mayo had been one of the most vocal participants in the debate, repeatedly telling shareholders to fight the bank’s move to consolidate.
Shareholder advisory firms Glass Lewis and ISS, and the California State Teachers’ Retirement System also lobbied shareholders to vote against the proposal.
Moynihan did have his plaudits however, including billionaire investor Warren Buffett.
REUTERS/James Lawler DugganWarren Buffett and Brian Moynihan.
The Oracle of Omaha, according to a representative for Berkshire, was “100% in support of Mr. Moynihan and believes he is doing an outstanding job for Bank of America shareholders.”
“When he took over as CEO, he was handed one of the toughest jobs in the history of American banking,” Buffett said.
Bank of America, meanwhile, said it saw the push as a step toward aligning itself with marketplace standards, and not as a deviation from sensible governance.
Goldman Sach’s Lloyd Blankfein, JPMorgan’s Jamie Dimon, and Morgan Stanley’s James Gorman all hold both CEO and chairman titles at their respective banks.
Ken Lewis was Bank of America’s CEO and chairman in 2009 when shareholders voted to separate the positions.
REUTERS / Bobby YipBrian Moynihan.
Here’s a spokesperson for Bank of America:
The board believes that having the same flexibility on board leadership that 97 percent of the S&P 500 now have, while still providing strong independent oversight, is in the best interest of stockholders.
No company has dug out deeper since the financial crisis, turned back to health with solid earnings, and has accumulated record levels of capital and liquidity – also to the benefit of our shareholders. The board respectfully recognizes that stockholders hold varying views on this matter, which is why the board committed to putting it to a vote.
Article originally posted in Business Insider website.