At Bank of America’s annual meeting on Wednesday, investors gave 35.5 percent support (based on votes “for” and “against”) to a new shareholder proposal that seeks to ban reimbursement benefits for relocating executives who lose money on the sale of their homes, according to a company filing.
The vote is a solid showing for a first-time proposal. For most new shareholder resolutions, it can take several years until they attract broad support from institutional investors. This result follows significant shareholder support for investor proposals that have sought to eliminate “golden coffin” benefits or tax gross-up payments at other companies in recent years.
The home loss perk proposal was filed by the CtW Investment Group, the investment arm of the Change to Win labor federation. The labor group submitted the proposal in response to a $553,500 home loss subsidy paid to the president of the Bank of America’s Countrywide home mortgage division. BofA tried to get permission from the Securities and Exchange Commission to exclude this resolution on "ordinary business" grounds, but the commission staff did not agree.
“Shareholders have showed a strong level of support for this proposal to end home loss reimbursement for executives,” said Bill Patterson, director of CtW Investment Group. “Given its role as a mortgage lender, the bank’s board should act quickly to eliminate this perquisite and restore credibility.”
Also at Bank of America, investors gave 39.5 percent support (based on votes cast “for” and “against”) to another first-year proposal that seeks an independent audit committee report on the bank’s mortgage and foreclosure practices. This result is the best showing so far for this resolution, which was filed by New York City’s pension funds. Similar proposals won 29.3 percent support at Citigroup and 22.8 percent approval at Wells Fargo.
“We are pleased with the strong support Bank of America shareholders showed for the NYC Pension Funds call that the bank's board clean house,” NYC Comptroller John Liu said in a press release today. “Bank of America’s board cannot ignore the substantial block of shareholders who want an independent audit of the bank's mortgage and foreclosure practices.”