By Christina Rexrode
Bank of America Corp. defended its decision last fall to give
the chairman title to CEO Brian Moynihan, saying it made the move
after careful consideration and he is well suited for the job.
In a regulatory filing Thursday, the bank said its board's
corporate governance committee "deliberates on and discusses the
appropriate leadership structure for the board based on the needs
of our company" at least every year.
Mr. Moynihan deserved the chairman job, the bank said, because
of "leadership qualities, management capability, knowledge of the
business and industry, and a long-term, strategic perspective" that
he has laid out during five years as CEO, the bank said.
That decision to give the chairman role to Mr. Moynihan, CEO
since 2010, has been criticized by some investors, partly because
the board had to override a 2009 shareholder vote requiring that
the jobs be held by separate people.
The board said it went through "months of thorough deliberation"
before wiping out the shareholder amendment and said the 2009 vote
was made during a different era, in the depths of the financial
crisis. The bank acknowledged, however, that some shareholders who
supported the 2009 proposal--which drew votes from large
institutional investors who often vote in line with
management--believe that the two roles should always be
separated.
The board's corporate governance committee "recognizes that
there is a variety of viewpoints concerning a board's optimal
leadership structure, " the bank said.
The bank also noted that most big U.S. banks are run by a single
person holding both the chairman and CEO roles. The board also
didn't find any conclusive data to prove any correlation between
having an independent board chairman and "superior corporate
governance or performance."
The bank noted it had appointed another board member, Jack
Bovender, as lead independent director when it made Mr. Moynihan
the chairman. The bank said Mr. Bovender, who held the roles of
chairman and CEO at hospital chain HCA Inc., had experience running
a highly regulated company and showed "a readiness to challenge
management."
As expected, the bank disclosed it had cut Mr. Moynihan's 2014
pay, to $13 million from $14 million. It also cut the pay for other
top executives, including its chief financial officer, general
counsel and the head of its investment bank.
Write to Christina Rexrode at christina.rexrode@wsj.com
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