By Joann S. Lublin
Two major public pension funds joined the drive for Bank of America Corp. shareholders to oppose a corporate bylaw change that lets Brian Moynihan serve as both chief executive and chairman.
California Public Employees' Retirement System and California State Teachers' Retirement System sent a letter Monday to the bank disclosing they will vote against the change. Calpers and Calstrs are the biggest and second biggest pension funds in the U.S. by assets. Together, the two funds own 63.6 million Bank of America shares, valued at about $1 billion and representing less than 1% of the total shares outstanding.
Bank board members angered some investors last October by deciding to change the bank's bylaws and give the chairman role to Mr. Moynihan, their CEO for more than five years. The board didn't consult institutional investors ahead of the switch, even though shareholders had voted in 2009 that the jobs of chairman and CEO must be held by different individuals. The earlier rule won approval during the depths of the financial crisis.
Bowing to shareholder complaints just before its annual meeting last May, the bank announced plans to let investors vote on the board's decision. That vote occurs at a Sept. 22 special shareholder meeting.
In a letter sent Monday to the bank's lead director Jack O. Bovender, the funds said, "Since Mr. Moynihan's appointment as CEO in January 2010, the company has continued to underperform" its peers. The letter continued: "We do not believe now is the time to reduce oversight of management by combining the roles of CEO and chair."
A Bank of America spokesman said he hadn't seen the letter and had no immediate comment.
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