Activists Put Their Stamp on Bank Annual Meetings
May 4, 2015 12:40 PM
Thanks to aggressive behavior by investor and other activists, bankers are sweating environmental, corporate governance, lobbying and other issues not to mention their jobs when they hold annual meetings. Those are on top of the usual protests and other wacky happenings.
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B of A 's Core Questions
Past annual meetings for Bank of America have included screaming hecklers , dozens of protestors and a singing rabbi . This year's meeting, scheduled for Wednesday in Charlotte, N.C., may feature more wacky guests, but there will be plenty of serious business. Shareholders will vote on a proposal to form an independent committee to assess the sale of the bank's noncore assets, and a separate proposal to require the company to fully disclose its lobbying expenses . That said, the biggest buzz will no doubt be B of A's decision, announced Monday , to let investors vote at a later date on the controversial bylaw change that handed CEO Brian Moynihan the chairman's title, too.
Image: Bloomberg News
Speaking of Splitting Chairman and CEO Jobs
JPMorgan Chase holds its annual meeting on May 19 in downtown Detroit, where the company has pledged to spend $100 million to encourage the city's economic recovery. During the meeting, shareholders will vote on several controversial proposals, such as whether to require JPMorgan to split the roles of chairman and chief executive . Current Chairman and CEO Jamie Dimon has opposed that measure, which failed the last time it came up for a vote in 2013.
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How Many Lobbyists Are Hiding Behind that Curtain?
More than a quarter of Citigroup's shareholders at its annual meeting voted in favor of the company disclosing more information about its lobbying activities . The tally was not enough for the measure to pass, but outside experts said that many votes should get CEO Michael Corbat's attention.
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On Regulatory Inquiries and Proper Channels
Wells Fargo's Chairman and CEO John Stumpf fielded questions from shareholders at the company's annual meeting last week on a variety of matters, such as the nature of meetings between federal regulators and Wells Fargo directors. "Directors do have a more open and direct process with regulators, but not at the expense of management," Stumpf said. Directors will push back and say, "'This is a management responsibility,'" he said.
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Coal Protestors Celebrate
An environmental-advocacy group praised PNC Financial Services Group, led by Bill Demchak, at its annual meeting last week for deciding to reduce its business with companies that conduct mountaintop-removal coal mining . Environmentalists had protested at PNC's past annual meetings, and this year said they would continue to monitor PNC's progress.
Dividend Divide
Speaking of PNC
It is the biggest shareholder in BlackRock, the world's largest asset manager. BlackRock CEO Laurence Fink recently sent a letter to CEOs asking them to pull back on stock buybacks and dividend increases , saying those moves help activist investors and hurt companies in the long run. Demchak must have missed it. He touted PNC's recent stock buyback and dividend hike at its annual meeting.
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Safe for Now
Gerald Hassell, chairman and CEO of Bank of New York Mellon, received a vote of approval from the activist shareholder who recently secured a seat on the company's board. Edward Garden of Trian Fund Management said during BNY Mellon's April 14 annual meeting that Hassell was not in danger of losing his job.
Image: Bloomberg News
Small Banks Take Flak, Too
A handful of community banks will face challenges from activist investors at this year's annual meetings. Shareholders in Metro Bancorp in Harrisburg, Pa., will vote on PL Capital's proposal to seek two board seats ; Metro has not set a date for its meeting. Joseph Stilwell is pursuing his fourth proxy battle at Harvard Illinois Bancorp, where he seeks two board seats.
Oracle of Omaha's Bank Take
Although not a bank, Warren Buffett's Berkshire Hathaway is a major shareholder in several financial institutions, including Wells Fargo, U.S. Bancorp and American Express, and it owns preferred stock and warrants in Bank of America. Berkshire held its annual meeting in Omaha, Neb. , on Saturday, at which Buffett spent less time talking about his bank holdings and more time defending his position that Berkshire's insurance operations are not systemically important .
Image: Bloomberg News
