CalPERS will vote against the re-election of six Bank of America Corp. directors because they “failed to fully disclose the true financial condition of Merrill Lynch” before the merger of the two companies, according to a statement today from the pension fund. The merger closed Jan. 1, 2009.
The $213.3 billion California Public Employees' Retirement System, Sacramento, plans to vote in favor of ratifying the executive compensation of Bank of America top executives, a non-binding board-sponsored proposal seeking approval of their pay.
CalPERS will oppose the re-election of directors Frank P. Bramble Sr., Virgis W. Colbert, Charles K. Gifford, Monica C. Lozano, Thomas J. May and Charles O. Rossotti at the company's annual meeting April 28, the statement said.
“Shareowners did not have complete or accurate information prior to approving the merger, and Bank of America's stock price fell dramatically,” Anne Simpson, senior portfolio manager who heads the CalPERS corporate governance program, said in the statement. “Moreover, Merrill executives received bonuses that weren't disclosed to us before the merger.”
“The six incumbent directors were among all 18 Bank of America directors whom CalPERS opposed last year,” according to the statement. “Also on this year's proxy ballot are seven other Bank of America directors who weren't on the board during the Merrill Lynch merger and whom the pension fund supports” in their re-election.
CalPERS' plans to vote in favor of all seven shareholder proposals, including one calling for an advisory vote on executive compensation, the statement said. Bank of America's board opposes that shareholder proposal, calling it vague in communicating useful information compared with the board-sponsored vote on executive compensation, according to the company's proxy statement.
Other shareholder proposals call for the company to report on its over-the-counter derivatives trading, on CEO succession planning, on previous government employment of top executives, and on the cost of executive pay that is non-deductible for the company. Additional shareholder proposals call for allowing shareholders the ability to call a special meeting and for a policy on the recovery of unearned incentive pay as a result of financial restatement.
Bank of America opposes all the other shareholder proposals, according to the proxy statement.
CalPERS has more than $1.1 billion invested in Bank of America equity and fixed-income securities, including 32,696,289 shares of stock, according to the fund's website.