Glass Lewis Opposes BofA Board Proposal
September 02 2015 - 6:50PM
Dow Jones News
​Proxy advisory firm Glass Lewis & Co. is recommending
shareholders vote against a board proposal by Bank of America Corp.
that would let the bank's chief executive, Brian Moynihan, keep the
title of chairman.
The advisory firm generally supports having the role of CEO and
chairman held by different people, and noted that Bank of America
shareholders have previously voted to keep the positions
separate.
"We do not believe the Company has provided sufficient rationale
that shareholders should ratify the board's decision to repeal a
hard-fought governance reform," Glass Lewis wrote in its report to
clients.
Shareholders are scheduled to vote on the proposal at a special
meeting on Sept. 22.
The Glass Lewis recommendation is the latest step in what could
be a showdown between the bank and its shareholders over Mr.
Moynihan's role. Institutional Shareholder Services, another
influential proxy advisory firm, expects to release its
recommendation on the Bank of America proposal "in the next few
days," a spokesman said Wednesday.
A Bank of America spokesman said the board "recognizes that some
have a fixed view on board leadership structure, but the board
believes that it is in the best interest of shareholders to have
the same flexibility that nearly all the S&P 500 companies
already have in determining its appropriate leadership structure as
circumstances warrant."
While most S&P 500 companies aren't restricted by bylaws
requiring they have a separate chairman, about half of those
companies do separate the roles, according to ISS' QuickScore
database.
Glass Lewis said its recommendation wasn't to be interpreted as
disapproval of Mr. Moynihan.
The bank's board last year added the title of chairman for Mr.
Moynihan, the CEO since 2010. It was an unusual move because
shareholders had voted in 2009 that the roles should be held by
separate people, and shareholders' displeasure appeared to catch
the board off guard.
The bank backtracked slightly this year by saying that
shareholders would be allowed to vote, retroactively, on the
decision, and the bank is preparing for that vote in less than
three weeks. Last week, the CtW Investment Group recommended that
investors vote against the bank. Two big pension funds, the
California Public Employees' Retirement System and California State
Teachers' Retirement System, said this week that they will also
vote against the bank.
Bank of American has said it believes Mr. Moynihan deserves the
role, for his work steering the bank through a pile of legal costs
and loan losses. It has painted Mr. Moynihan's chairmanship as a
promotion that signals that the bank is no longer in crisis
mode.
The bank has also pointed out that other big U.S. banks, like
J.P. Morgan Chase & Co. and Wells Fargo & Co., combine the
roles of chairman and CEO under one person. Glass Lewis praised
Bank of America for engaging with shareholders on the matter, but
said that wasn't a convincing argument, saying that investors were
"particularly concerned with the independence of Bank of America's
board, specifically."
Write to Joann S. Lublin at joann.lublin@wsj.com and Christina
Rexrode at christina.rexrode@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 02, 2015 18:35 ET (22:35 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
JP Morgan Chase (NYSE:JPM)
Historical Stock Chart
From Aug 2024 to Sep 2024
JP Morgan Chase (NYSE:JPM)
Historical Stock Chart
From Sep 2023 to Sep 2024