Bank Of America Is So Desperate To Win A Potentially Awkward Vote That It …

October 1, 2015 Nemes Random

Bank of America is facing a critical vote next week– and it looks like the board is taking out all the stops to avoid an awkward loss.

On Tuesday, investors will certainly be asked to vote on whether CEO and Chairman Brian Moynihan must keep the chairman title.

He was handed that function in October 2014, in a move that disturbed some financiers and went against a 2009 vote to divide the functions.

Eager to win the yes vote, the banks board has begun lobbying investors, ranging from top-20 financiers to small-time, individual shareholders.

Joel West, a California company instructor and owner of 512 BAC shares, told Business Expert that he got a phone call this week from a proxy solicitor working on behalf of the bank.

As a small-time investor, he hadnt believed much about the proxy statement he got in the mail.

Then he got a telephone call from a number connected with Georgeson, one of BAMLs proxy solicitors. The individual on the phone asked him if he would likewant to vote, but when he pressed her for information on the vote, he could not get a clear response.

At some time they stated, Management advises that you vote yes, West stated.

The proxy solicitor then asked him if he would such aswant to enact favor of managements position.

REUTERS/Brendan McDermid

He stated the lawyers did not point out Moynihans name, nor the words chairman or CEO. They just described the board leadership structure.

Business Insider called Georgeson for remark. Sharon Harding, who recognized herself as a representative on behalf of Bank of America, validated that the proxy solicitor has actually reached out to individual shareholders on behalf of the bank suggesting they vote in favor of managements position.

She said the practice is not uncommon for the firm.

Bank of America decreased to comment on the individual-investor calls.

Desperate times

CLSA analyst Mike Mayo is a fierce proponent of the no vote.

Discussing the individual shareholder calls, Mayo said, Desperate times call for desperate steps– but it might work. A $2 trillion bank has a lot of impact.

The procedure by the board, in aggregate, appears out of step with much of the market, he said.

Mayo said the whole ordeal would look bad for the board — no matter which method the vote winds up going. Even if the vote passes he thinks there will certainly be enough of a no vote to send out the message that its time for the board to update.

Stay tuned for more as Tuesdays vote draws nearer.


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