BofA chairman tells shareholders: ‘The train is on the tracks’

BofA chairman tells shareholders: ‘The train is on the tracks’


by DEON ROBERTS & ANDREW DUNN / Charlotte Observer

Posted on May 8, 2013 at 6:03 PM

Updated Wednesday, May 8 at 6:21 PM

CHARLOTTE, N.C. -- In between dozens of complaints about coal financing and mortgages, Bank of America CEO Brian Moynihan told shareholders gathered in Charlotte on Wednesday that the bank’s path to higher earnings, and therefore dividends, is straightforward.

“Our best opportunities for growth are to supply four or five key products to people: bank accounts, debit cards, credit cards, home finance, and car loans,” he said. “Our job is just to do that and do that and do that.”

A year after a highly contentious shareholder meeting, Wednesday’s event was more subdued both inside and outside. Only a few dozen protesters demonstrated outside the meeting, and the questions inside felt overall less hostile.

But the overarching message from the bank was that it has turned a corner after several years of settling massive litigation and absorbing mortgage losses.

“Three and a half years ago, our train was off the tracks,” Bank of America board chairman Chad Holliday said at the beginning of the meeting. “What I can report to you today from your board of directors: The train is on the tracks. All the wheels are touching. We are moving forward. And we have learned from the past.”

About 200 people filed in to the meeting room in the Charlotte Marriott Center City on Trade Street. The business component of the meeting was fairly straightforward: All of the bank’s directors were elected with more than 96 percent of the vote.

All of the shareholder proposals were voted down. The closest vote, at 63 percent against, was a proposal that would have required the bank to fully disclose its political spending.

But like last year, CEO Brian Moynihan faced a torrent of questions and criticism about the environmental record of the bank’s clients, primarily coal companies. Environmental questions were raised by 27 of the 41 people who spoke up at the meeting.

At one point, a Boston rabbi sang what she described as an “Appalachian spiritual” as she pleaded for the bank to stop funding coal companies.

After the first question on the topic, Moynihan acknowledged the “public debate” over coal companies and climate change, and said the bank makes decisions based on a “rational view” of what its clients do. He also asked global technology and operations executive Cathy Bessant to run through the bank’s $70 billion total commitment to funding green energy and other environmental projects over the next 10 years.

Several questioners also brought up the bank’s ongoing mortgage servicing issues that have resulted in several billion-dollar settlements. Earlier this week, New York Attorney General Eric Schneiderman announced that he planned to sue Bank of America and Wells Fargo over alleged violations of a $25 billion settlement made last year.

Shareholders, however, again rejected a proposal to conduct an external audit on the bank’s mortgage lending operations.

But the nearly two-hour back and forth was also notable for what wasn’t discussed: the Occupy Wall Street movement, executive pay, the 99 percent. The bank’s annual vote on executive pay passed with 93 percent approval.

Some levity

Inside, the atmosphere was also considerably more amicable than last year, when bank executives decided to forego an opening statement or presentation and instead dove into dozens of hostile comments as several hundred protesters closed down streets outside.

Holliday, the board chairman, asked the audience Wednesday whether they’d seen the bank’s new commercials, and then cracked, “If you haven’t, we sure wasted a lot of money.”

Later, Moynihan gently teased a Harvard student that her school wasn’t as good as Brown University, Moynihan’s alma mater.

And the bank also seemed to have taken some lessons from the past meeting. A year after hearing numerous questions about individual financial problems, Bank of America set up a room next door filled with bank employees ready to address anyone’s concerns. The bank also met privately with several environmental activist groups in the weeks leading up to the meeting.