BofA shareholders allow CEO Moynihan to remain chairman

Tue Sep 22, 2015 4:52pm EDT
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By Ross Kerber and Dan Freed

BOSTON/NEW YORK (Reuters) - Bank of America Corp (BAC.N: Quote) shareholders voted to allow Chief Executive Brian Moynihan to remain as chairman, handing a victory to a CEO who has been slowly turning the bank around since the financial crisis.

A group of shareholders, mainly public pension plans, had campaigned to strip Moynihan of his chairman title, arguing that the CEO needed more oversight from an independent overseer on the board. They were upset that the bank had unilaterally changed its bylaws last year to allow Moynihan to hold both roles, after investors had voted in 2009 to separate them.

But mutual funds and institutional investors, which are among the bank's top shareholders, largely did not support the campaign, according to a person familiar with the matter who was not authorized to speak publicly about the vote. These investors tend to prefer talking directly to management about governance matters, instead of agitating externally.

One of those investors, State Street Global Advisors, told Reuters that it wanted to allow Bank of America's board "the flexibility to choose their own leadership structure."

The more vocal investors that campaigned for change, including California Public Employees' Retirement System and the California State Teachers' Retirement System, held smaller stakes.

They managed to rally 37 percent of votes cast, a sizeable minority that is larger than average for such votes.

"Shareholders sent a message to the board that they are not happy," said Mike Mayo, a veteran banking analyst at CLSA Americas.

Jack Bovender, the bank's lead independent director, acknowledged investor discontent, and promised to do a better job reaching out to investors.   Continued...

Bank of America CEO Brian Moynihan looks on during the White House summit on cybersecurity and consumer protection in Palo Alto, California, in this file photo taken February 13, 2015. REUTERS/Robert Galbraith/Files