Bank of America Corp (NYSE:BAC) came under criticism from its shareholders for its decision to name the CEO, Brian Moynihan as Chairman last fall. The Bank stated that its corporate governance committee had come to the conclusion that Mr Moynihan was best suited for the job. They concluded that he had shown leadership and management qualities in the past five years as the CEO that rendered him fit for the post of Chairman. This time the Board of Directors decided not to put on vote its decision to unite the roles of Chairman and CEO.
This comes in the backdrop of a 2009 shareholder vote to strip previous CEO Ken Lewis of Chairmanship. The Board of directors hence overrode the 2009 shareholder decision to separate the CEO and Chairman Posts. The Board also noted that many big Banks in the U.S.are being run by person holding both the Chairman and CEO roles. The Bank stated that they had found no correlation between “superior corporate governance or performance” and independent Chairman.
The Board also noted that the 2009 decision by
shareholders was made during the financial crisis and in situations that are no
longer valid. The Bank accepted that 2009 stockholder vote was due to “dissatisfaction with the then Board’s governance and oversight.” It noted that the Bank had undergone significant changes in its governance like:
- Adding eight new directors in last three years to its fifteen member board.
- Jack Bovender, the previous Chairman and CEO at HCA Inc., has been appointed the lead independent director. Mr. Bovender, notes, has shown a “readiness to challenge management.”
- The CEO and Chairman, Mr. Moynihan’s remuneration has been cut to $13 million from $14 million.
So, despite shareholders protests, it seems that Mr. Moynihan will continue as the Chairman and CEO of Bank of America Corp (NYSE:BAC).