BAC Bank of America Corporation

By Christina Rexrode 

CHARLOTTE, N.C. -- At Bank of America Corp.'s annual shareholder meeting Wednesday, a 15-year-old brought up the elephant in the room.

What is the bank doing to raise the share price?

That question came from Natalie Clarke, a ninth-grader who owns 5,000 shares given to her when she was a baby, but it echoed challenges being raised by restless shareholders at a number of banks as performance stagnates under low interest rates, new regulatory burdens and volatile markets.

At Citigroup Inc.'s annual meeting this week, about one-third of voting shareholders cast ballots against the bank's executive pay plan, a reflection of the underperforming stock price. Some investors at regional bank Comerica Inc., meanwhile, have called for the bank to sell itself to a larger player.

And Miss Clarke was one of a number of investors in Bank of America wanting to know when they might get a better value for their shares.

Miss Clarke, who is getting her tonsils out Thursday, has attended three consecutive Bank of America annual meetings, asking questions about her father being laid off from the bank and how much women were paid compared with men at the bank. Miss Clarke's father has since been rehired.

The teenager said she has given more thought to the stock price recently, since she has begun considering whether her shares could help pay for college. She hopes to go to the University of Notre Dame, where Bank of America Chief Executive Brian Moynihan attended law school.

At the meeting, Miss Clarke rose to ask the CEO what the bank is doing to become more efficient, a metric where it lags behind its peers.

Mr. Moynihan replied that the bank would continue to cut costs. "Good luck getting into Notre Dame," he added. "It is very difficult these years."

Miss Clarke's questions were soon echoed by others. Mr. Moynihan became CEO at the start of 2010, when the bank was still in crisis mode, and spent the first several years slogging through mountains of litigation and regulatory problems. But now that those are largely in the past, he needs to show that he can boost shareholder returns.

Through Wednesday, the shares are roughly flat since he became CEO and down 11% so far this year, trading at about 2/3 of book value. The share decline compares unfavorably with the 3.5% drop in the KBW Nasdaq Bank Index and smaller drops among Bank of America's largest peers.

"Obviously we feel the stock price should be higher," Mr. Moynihan said at the meeting, adding that the bank is working to show investors that it will be able to turn in steady earnings even in another financial crisis. He said his entire net worth is tied up with the company, and that he has never sold shares.

Throughout the meeting, Mr. Moynihan and other executives repeated familiar themes for how the bank can improve earnings: cutting costs; working to improve customer satisfaction; and adding mobile-banking customers. Bank of America, with its large base of U.S. deposits, has also been particularly hurt by low long-term interest rates.

CLSA analyst Mike Mayo, who attended the meeting, asked whether the bank needed to come up with a more drastic Plan B, like breaking apart into smaller firms.

"There's a perception that you guys shine your shoes, go to work and wait for interest rates to rise," Mr. Mayo said. He said later that Miss Clarke's questions had encapsulated the concerns of other investors.

In an interview, Miss Clarke said she was puzzled as to why the bank raised the CEO's pay in a year when the share price was down.

Bank of America's stock fell 6% in 2015, but the bank earned its biggest annual profit in nearly a decade, and it raised Mr. Moynihan's pay to $16 million from $13 million for 2014.

The bank said in regulatory filings that it made progress last year in simplifying the company, pursuing responsible growth and resolving mortgage-related matters.

Shareholders gave a vote of confidence to Mr. Moynihan, with about 93% approving his pay package and those of other top executives. All Bank of America board members were re-elected with at least 94% approval.

Miss Clarke, who lives in Harrisburg, N.C., with her parents and schnauzer-terrier mix pet dog, says she doesn't understand why more shareholders don't take an active interest in the companies they own. "There's a lot of people who own stock in Bank of America," Miss Clarke said, but at the annual meeting, "there's barely enough to fill half a ballroom at a hotel." About 100 to 150 people attended the meeting.

In 2002, around the time that Miss Clarke received her shares, Bank of America's shares traded at an average of nearly $34. They fell seven cents Wednesday to $15.02.

"You and I are both looking at some pretty bad numbers," Miss Clarke told Mr. Moynihan.

Write to Christina Rexrode at christina.rexrode@wsj.com

(END) Dow Jones Newswires

April 29, 2016 02:47 ET (06:47 GMT)

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