Bank of America Corp. Chief Executive Officer Brian Moynihan survived a battle to remove him as chairman, fending off critics including the biggest U.S. pension funds.
A resolution allowing Moynihan to remain chairman and CEO passed with about 63 percent of the votes, the Charlotte, North Carolina-based company said Tuesday during a special meeting, citing a preliminary tally.
Pension funds and proxy advisers had argued that more independent oversight was needed for Moynihan, who’s nearing his sixth year leading Bank of America, as the stock lags behind peers. The bank said Moynihan, 55, deserved the dual roles after overhauling its balance sheet and resolving legal cases.
The vote ratifies the board’s decision last year to rewrite governance rules that shareholders initiated in 2009. The October 2014 move by Bank of America galvanized critics who said the underperformance of the firm’s shares and the company’s struggles with annual industry stress tests were proof that more supervision was needed. Pension funds including the California Public Employees’ Retirement System and the California State Teachers’ Retirement System said they would vote against management.
“Anything less than a 70 percent support level is really going to demand questions of this board,” Michael Pryce-Jones, corporate-governance director at CtW Investment Group, said in a Bloomberg TV interview before the meeting. Possible improvements could include bringing in new directors, he said. CtW, which advocates for union-affiliated pension funds, had said Moynihan should give up the chairman title.
In a meeting with reporters after the vote, Moynihan called the bank’s board “strong” and indicated that sweeping changes to its composition shouldn’t be expected. When asked if Charles Gifford or Thomas May, long-serving directors, might step down before the next shareholder meeting, Moynihan said the bank had asked Gifford to serve on the board another year. Gifford has reached the firm’s suggested board retirement age of 72.
“We’re going to engage with large institutional shareholders in a more proactive way than in the past,” Jack Bovender, the bank’s lead independent director, told reporters. The board didn’t anticipate the furor that came after making the governance change in late 2014, he said.
At the time, the board considered making Moynihan temporary chairman when Chad Holliday stepped down from that role, but opted not to because that could make it seem as if they lacked full confidence in their CEO, Bovender said.
Shares of the company fell 1.1 percent to $15.53 at 12:18 p.m. in New York, compared with a 1.5 percent drop in the Standard & Poor’s 500 Financials Index.