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The
California Public Employees' Retirement System (Calpers) and the
California State Teachers' Retirement System (Calstrs) sent a
letter on Monday to the bank's lead director, Jack Bovender,
saying that the roles of CEO and chair of the board have
inherent conflicts which require the two posts to be separate.
The funds wrote that since Moynihan was appointed CEO, the bank
has underperformed and that it needs stronger, more independent
oversight and not less.
"We believe the Board's rationale for making this change is
fundamentally flawed and we disagree with many assertions made
in the Special Meeting proxy," the funds wrote.
The funds also said the company has never provided a valid
business rationale for combining the roles.
Calstrs and Calpers together hold less than 1 percent of the
total shares outstanding in Bank of America.
"The board believes that having the same flexibility on board
leadership that 97 percent of the S&P 500 now have, while still
providing strong independent oversight, is in the best interest
of stockholders," said Lawrence Grayson, a spokesman for Bank of
America.
The board in October unilaterally changed the company bylaws to
allow CEO Brian Moynihan to become chairman.
In May, just two days before the annual shareholder meeting, the
company said it would hold a shareholder vote on the change, to
be held no later than 2016. That vote will be held at a Sept. 22
special shareholder meeting.
"The board respectfully recognizes that stockholders hold
varying views on this matter, which is why the board committed
to putting it to a vote," Grayson said.
Bank of America had combined the roles of chairman and chief
executive until 2009, when shareholders voted to strip then
chief executive Ken Lewis of his chairman title. Investors had
objected to his decision to acquire Merrill Lynch at the peak of
the financial crisis.
(Reporting by Shivam Srivastava in Bengaluru and Robin Respaut
in San Francisco; Editing by Anupama Dwivedi)
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