By Christina Rexrode
Bank of America Corp. shareholders re-elected all directors
Wednesday, according to preliminary tallies from the bank's annual
meeting in its headquarters city of Charlotte, N.C.
In addition, Chief Executive and Chairman Brian Moynihan's pay
was approved by 94% of shareholders, in line with last year's
approval rating.
The bank didn't immediately disclose the margins by which the
board members were elected. Two influential proxy-advisory firms,
Institutional Shareholder Services and Glass Lewis, had recommended
that investors vote against the head of the board's
corporate-governance committee, Tom May.
At the meeting, attended by about 200 people, Mr. Moynihan
highlighted bright spots such as investment-banking fees and
home-equity loans. He reiterated that he will continue to make the
company simpler and easier to manage. The bank's first-quarter
results had disappointed analysts, but Mr. Moynihan said that the
bank wouldn't take on risky types of lending just for the sake of
growth.
"We have to grow, no excuses," Mr. Moynihan said. "But we have
to grow the right way."
A shareholder proposal asking the bank to examine whether it
should split in two, separating the consumer bank from the
investment bank, didn't pass. Mr. Moynihan said that size doesn't
equate to riskiness, and that Bank of America is committed to a
well-regulated financial industry.
"Are we more risky than we were before the crisis? Have we
gotten bigger? Are we trying to repeal the legislation that changed
the terms under which we operate?" Mr. Moynihan said. "Believe me,
this isn't the case."
Some shareholders asked about the board's decision in October to
elevate Mr. Moynihan to the chairman role, even though shareholders
in 2009 passed a binding resolution requiring the two jobs be
separated. Investors in recent weeks have registered unhappiness
that they weren't consulted ahead of time.
The bank announced Monday that it will let shareholders vote, at
some point in the next year, on whether they confirm or reject the
board's decision.
Jack Bovender, a board member who became the lead independent
director when Mr. Moynihan was elevated to chairman, said the board
had had a thorough discussion before promoting Mr. Moynihan and was
under a deadline because Chad Holliday, the former chairman, had
made clear that he wanted to leave.
But Mr. Bovender also said it became clear to him, while talking
to large investors in the past two or three weeks, that they were
unhappy that the board hadn't sought their input before the
announcement.
""It became apparent to me through those conversations that they
were right," Mr. Bovender said. "They deserved the right as
shareholders to vote yes or no."
Mr. Moynihan called Mr. Bovender on Saturday to suggest letting
shareholders vote on the matter, Mr. Bovender said during the
meeting. Mr. Moynihan said afterward that he wanted to "clear the
air."
Mr. Bovender also said that the 2009 shareholder proposal was
passed under a different CEO, and when the company was "badly
broken." He called Mr. Moynihan a "high-performing" leader.
"I thought personally that he deserved to have that combination
of chairman and CEO," Mr. Bovender said. "I still feel that
today."
The meeting, which lasted about two hours, was largely cordial.
Other shareholders praised the bank for its work on housing for
military veterans and low-income borrowers, and the bank also said
it would continue to reduce its lending exposure to coal-mining
companies.
Some shareholders asked about the bank's stock price, which is
still far below where it was before the financial crisis, and the
dividend, which remains below that of rivals such as J.P. Morgan
Chase & Co. and Wells Fargo & Co.
"We still have work to do," Mr. Moynihan said. "We fully admit
that."
Write to Christina Rexrode at christina.rexrode@wsj.com
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