B of A's Moynihan Takes Verbal Abuse, Wins Shareholder Votes

Angry shareholders and protestors hurled epithets like "felon" at Bank of America's (BAC) chief Brian Moynihan for more than two hours at the company's annual meeting Wednesday.

Moynihan calmly fielded more than 40 questions at the meeting in Charlotte, N.C., many from environmentalists who complained about toxic coal ash and urged B of A to stop financing the coal industry.

Despite the verbal abuse and outbursts ("Get your money out of my democracy!"), the substantive issues went management's way. Shareholders cast 92% of their votes in favor of the bank's executive-pay plan and the re-nomination of all 12 board members, a B of A proxy official said. Investors also rejected six shareholder proposals, including one to ban political spending and another to require an independent review of B of A's mortgage-servicing practices.

Those management-friendly results were overshadowed by drama. One shareholder asked Moynihan to forgive her student loans. Several pleaded for help in resolving their mortgage problems, including one shareholder who asked for modifications on 11 mortgages.

"We're doing everything we can," Moynihan said in response to a question about foreclosures. "These are problems we inherited from other companies and we're trying to clean up the mess."

When Michael Garland, governance director at the New York City Office of the Comptroller, told Moynihan that the municipal agency continued to have "concerns about the integrity of the bank's servicing practices," the audience burst into applause.

The approval of the pay packages at B of A is noteworthy in a year when investors have rejected compensation policies at Citigroup (NYSE: C), FirstMerit (FMER) and a handful of small community banks.

Just 58% of stockholders gave their assent to say-on-pay proposals at Bank of New York Mellon (BK). The Dodd-Frank Act mandates the advisory votes.

At least four people were arrested outside B of A's annual meeting, which drew an estimated 500 protesters, according to the Winston-Salem Journal.

Inside the meeting, Moynihan ran a tight ship, allocating only two minutes to each shareholder and responding succinctly to only a few of them.

Several shareholders asked Moynihan to voluntarily give up his pay or refuse to accept a bonus. He received no cash bonus, and most of his stock pays only if the company attains certain performance goals.

Moynihan received total compensation of $8.1 million in 2011, up from $1.9 million in 2010. ISS Proxy Advisory Services and Glass Lewis & Co, which advise large shareholders on how to vote at annual meetings, backed B of A's pay plan.

A former Merrill Lynch employee asked why B of A had not divested of Countrywide, the lender it bought in 2008 that has contributed substantially to its mortgage losses.

"To divest you have to have a buyer," Moynihan said.

At various points, Moynihan tried to rebut some inaccurate comments from shareholders but his comments fell mostly on deaf ears. Some shareholders claimed that B of A does not pay any taxes, even though Moynihan repeatedly said the bank paid $2 billion in taxes last year. He also denied several claims that B of A has engaged in payday lending.

George Goehl, the executive director of National People's Action, asked Moynihan to "prove to us that you are not too big to be held accountable."

"We're your neighbors and we have to wake up every day looking at blocks with four or five vacant properties," Goehl said. "We invite you to come meet your neighbors all across the country."

Moynihan replied that B of A has several programs that deal with vacant properties.

"I take very seriously everything you've said — you're all our neighbors," he said. "But there are 50 million clients that are our customers and neighbors, too."