Proxy Advisors Tell Bank of America to Split Chairman-CEO Roles

By Christina Rexrode 

The topic of an independent board chairman is back on the ballot at Bank of America Corp.

Two influential proxy-advisory firms, Institutional Shareholder Services Inc. and Glass Lewis, have recommended shareholders vote in favor of a proposal that would split the roles of chairman and CEO at the bank.

ISS and Glass Lewis, which advise big investors on how to vote their shares, both said having an independent chairman would better protect shareholders, since one of the major tasks of the board is to oversee the CEO and other executives. ISS said in its recommendation this week that the financial crisis had "underscored the need for effective board oversight."

Brian Moynihan is both CEO and chairman at Bank of America.

The proposal shareholders will vote on at the bank's upcoming annual meeting wouldn't strip Mr. Moynihan of either job. Instead, it asks the board to adopt a policy that the board chairman be separate from the CEO "whenever possible."

The bank said in regulatory filings that the board provides "objective, independent" oversight even without a separate chairman, and that the board "deliberates on and discusses" its structure at least annually. "We and our stockholders benefit from an executive chairman with deep experience in and knowledge of the financial services industry," the bank said in the filing, referring to Mr. Moynihan.

ISS and Glass Lewis often recommend separating the chairman and CEO jobs, but the topic has been contentious at Bank of America. In 2014, its board gave the chairman job to Mr. Moynihan, who at that point only held the CEO title, even though shareholders had voted several years beforehand to keep the jobs separate. The bank gave investors the right to vote on the change a year after it took effect, and had to mount a lobbying campaign to win over skeptical investors.

In the end, shareholders allowed Mr. Moynihan to keep both jobs. ISS and Glass Lewis had both recommended splitting the jobs back then, as well.

Before that, the last time Bank of America shareholders voted on splitting the chairman and CEO jobs was in 2009. Shareholders narrowly approved the measure, stripping Mr. Moynihan's predecessor, Ken Lewis, of the chairman role.

The bank's annual shareholder meeting is April 26.

Write to Christina Rexrode at [e-mail]

(END) Dow Jones Newswires

April 07, 2017 14:47 ET (18:47 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.