Brian Moynihan, chairman and chief executive of Bank of America, is having a good morning after 63 percent of shareholders voted Tuesday to let him keep both roles. Moynihan, who has served as the bank’s CEO since 2010, was appointed to the dual role of chairman last fall by the board, reversing a 2009 shareholder vote to keep the two roles separate. Bank officials cast the move as rewarding Moynihan for his work in navigating Bank of America through the fallout from the financial crisis. Others were less convinced, with two pension funds—the California Public Employees’ Retirement System and the California State Teachers’ Retirement System—arguing staunchly against the combined roles:
“Since Mr. Moynihan’s appointment as C.E.O. in January 2010, the company has continued to underperform, has failed important Fed stress tests, and has perpetuated a subpar engagement with its shareholders,” the California pension funds wrote in a joint letter to the bank’s lead independent director last month. “Given these missteps, we do not believe now is the time to reduce oversight of management by combining the roles of C.E.O. and chair.”
Shareholder votes don’t often rise into the mainstream press, but as Tuesday’s vote approached, the campaigns on the matter drew serious attention. Earlier this month, Warren Buffett made headlines when he spoke up in favor of keeping Moynihan as both chairman and CEO, telling CNBC, “If I could vote, I would vote as management suggests.” A week later, Barney Frank, famously a co-sponsor of Dodd-Frank and advocate of sweeping Wall Street reform, also tossed his support to Moynihan. “I have a very good opinion of Brian,” he told Politico. “I have never understood the argument that in principle it’s bad to have the CEO also be the chair.”
The vote to let Moynihan retain both roles is a big win for his camp and an equally big statement of confidence in his stewardship of the bank. Leading up to Tuesday, people thought the results could have gone either way. At least based on recent history though, the odds seem to have been in Moynihan’s favor. Per the Wall Street Journal, proposals to split the chairman and CEO roles at big U.S. companies have succeeded only 6 percent of the time over the past 10 years.