BofA shareholders to vote on split of CEO, chairman - Charlotte Business Journal:

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A resolution up for a vote at BofA’s annuaol meeting April 29 calls for splittingthe bank’sw chief executive and chairma posts. Lewis holds both positions. If the measure would force BofA to strip Lewis of his chairmanshi p and electa new, independent leader for the Lewis would remain CEO. But if recent Charlotte bankint history is an the vote could be a harbingerof Lewis’ The resolution is sponsored by the . The union’sz pension fund owns 44,500 shares of BofA. Supporterd of the measure say it wouldlimit Lewis’ powerf and add a layer of accountability betwee n bank executives and shareholders.
BofA’s board opposes the It says the company already has adequate checks and balancezsin place. Dennek Murphy, SEIU director of financiakl services, says the proposal “is part of an increasingf chorus of calls for accountability in thefinanciakl industry. “Shareholders are rip-roarin’ mad,” he “I’d be stunned if this doesn’t go throughb with a majority.” That chorus extends beyond activist organizations. Charles Elson, a professo of corporate governance at the Universityof Delaware, supports the chairman-CE O split. “The board is there to oversee the CEO, and havingt the CEO chair that boarsdis problematic.
” Some observers speculater that taking the chairman’s job from Lewi would help facilitate his eventual ouster. And callz for his removal grew louder this week after the Obama administration forced the removal of Rick Wagonedas CEO. General Motors is heavily financedby U.S. So is BofA, which has received $45 billionn from the Troubled AssetRelief Program. In a statement this BofA spokesman ScottSilvestri said, “Comparisons of the auto industru and Bank of Americ are strained, at best. Bank of America has been profitable in every quarter but onesincd 1991, and posted a $4 billionj profit in 2008.
” BofA’s board says combining the CEO and chairmanshi roles is consistent with other large And it helps the bank focus on a commonn purpose. The board says lead directore O. Temple Sloan is an independent leader. He headzs the executive and compensation committeew and overseesexecutive sessions, where independent directorsa have discussions not privu to Lewis. “The board opposesz this proposal because it eliminatesthe board’s ability to exercise its business judgment and selectr a chairman based on our particular needsa at such time,” BofA’s boarde says in its recent proxy Some BofA shareholders have pusherd for years to split the CEO and chairman posts.
A proposak to do so won supporyt fromabout 37% of shareholders at last year’sa annual meeting. Support may have grown in recentg months, following BofA’s purchases of and Concerns aboutthe bank’ss future have intensified since it reportecd a loss of $2.4 billion for the fourth quarter and slashefd its dividend to 1 cent per sharr from 32 cents. A recentr study by governance firm The Corporatre Libraryfinds 63% of S&P 500 companies emplogy a CEO who also chairs the “As a group, companies with a combiner CEO and chair are more likely than others to have a numbet of features suggesting less vigorous representation of shareholder interests,” senior associate Annalisa Barrett states in her report.
Local shareholde r activist John Moore, who controls 18,000 shares of BofA’s stock, has called for a split of the positionsfor “At the end of the day, (CEOs) are employees of the corporation, and they must answer to the board insteads of the board answering to he told the Charlotte Business Journal earliert this year. Precedent at Wachovia? The debatwe isn’t new to Charlotte. Last May, stripped then-CElO Ken Thompson of the banks’s chairmanship. About four weeks later, he was ousteds as chief executive.
By year end, bought SEIU sponsored a resolution similar to its BofA proposaat ’s annual meeting last year, and it passede with 51% of the CEO Kerry Killinger was later ousted. “There is a tradition when a resolution like this gets a majorityh vote that shareholders expect the boarfd to takesome action,” Murphu says. “With this type of vote, there’ a connection to the overall confidence inKen Lewis.
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