Two of the largest public pension funds in America are calling for Bank of America to strip Brian Moynihan of his joint title of Chairman and CEO.
Last October the Bank of America board of directors changed the company bylaws and combined the positions of Chairman and CEO. It was a controversial move. In a response to criticism, the Board allowed for a shareholder vote on the move which scheduled for later this month.
In a letter dated August 31st, pension funds CalPERS and CalSTRS, which represent California’s public employees and teachers, made it clear how they will vote. “We believe the Board's rationale for making this change is fundamentally flawed,” they wrote, adding that since Moynihan was named CEO in 2010, Bank of America “has continued to underperform, has failed important Fed stress tests and has perpetuated a sub-par engagement with its shareholders.
CalPERS and CalSTRS control less than 1 percent of Bank of America stock. However with combined assets of $476 billion, they are two of the largest and most influential pension funds in the world.
For the moment Bank of America’s board is holding firm. In a statement the company wrote “The board believes that having the same flexibility on board leadership that 97 percent of the S&P 500 now have, is in the best interest of stockholders.” The shareholder vote is scheduled for September 22nd.
