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UPDATE 1-ISS urges shareholders vote to strip BofA CEO Moynihan of chairman title
September 4, 2015 / 10:58 PM / 2 years ago

UPDATE 1-ISS urges shareholders vote to strip BofA CEO Moynihan of chairman title

(Adds details from ISS, background)

BOSTON, Sept 4 (Reuters) - Proxy adviser Institutional Shareholder Services on Friday recommended Bank of America shareholders vote to strip Chief Executive Brian Moynihan of his additional title of chairman, joining a chorus of critics ahead of a Sept. 22 shareholder meeting on the matter.

The Charlotte, North Carolina-based bank, which named Moynihan chairman in 2014, has been criticized by shareholders for ignoring their will after their 2009 vote to require an independent chairman.

ISS in its report backed that view, writing that “The board’s unilateral nullification of an independent chairman requirement in the company’s bylaws suggests that stronger independent board leadership is necessary.”

Shareholders, ISS wrote, “might benefit from the strongest form of independent oversight as the company continues to address operational and performance issues.”

Technically, investors will vote on whether to ratify bylaw changes to allow the bank to have a “lead independent director” when the chairman is not independent, its current board structure.

Bank of America has argued the changes give it more flexibility to determine the best leadership structure, and that its governance practices have changed dramatically since the 2009 vote during the financial crisis.

In its proxy materials the bank said if a majority of votes cast at the meeting oppose the bylaw changes, it will move back to having an independent chairman, effectively making the vote a test of whether to let Moynihan keep the chairmanship.

Rival proxy adviser Glass Lewis has also recommended that investors vote against ratifying the bylaw changes.

Reporting by Ross Kerber; Editing by Richard Chang

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