Goldman Sachs, BofA shareholders reject proposals for CEO-chair split By Reuters

Goldman Sachs, BofA shareholders reject proposals for CEO-chair split By Reuters

By Saeed Azhar and Nupur Anand

SALT LAKE CITY, Utah, NEW YORK (Reuters) – Shareholders of Goldman Sachs and Bank of America voted on Wednesday against proposals to split the CEO and chairman roles at the two banks, going against the pressure from influential proxy advisors to strengthen corporate governance.

Proxy advisors Institutional Shareholder Services (ISS) and Glass Lewis had urged shareholders to support the measures and remove Goldman CEO David Solomon and BofA CEO Brian Moynihan from their chairmanships.

Norway’s $1.6 trillion sovereign wealth fund, one of the world’s largest investors, had also indicated its support for the plan.

The vote “indicates that the majority of shareholders are satisfied with the company’s performance, as well as compensation, and do not want to risk shaking things up by changing oversight,” said Stephen Biggar, an analyst at Argus Research. “At the same time, the proposal has made significant progress compared to last year, so that the separation of president and CEO could possibly be adopted in the coming years.”

At Goldman’s annual shareholder meeting, the proposal from the conservative-leaning National Legal and Policy Center (NPLC) received 33 percent of shareholder votes, according to a preliminary count, up from 16 percent last year.

Solomon’s “poor decision-making” led to substantial losses in its retail division, Luke Perlot, associate director of NLPC’s Corporate Integrity Project, told investors in presenting the proposal.

After the vote failed, Perlot said the CEO’s errors in judgment “could have been avoided if there had been a serious check on his power.”

He added: “We are pleased that the vote in favor has doubled compared to last year, we are disappointed that these obvious examples of excess did not convince a majority to support our proposal.”

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A Goldman Sachs spokesperson referred to the company’s previous comments on the matter. Its governance committee has maintained that it considers a leading independent director, alongside the role of chairman and CEO, to be most effective at this time.

“We have taken decisive steps to refine our strategic direction and leverage our core strengths,” Solomon told the meeting in his opening remarks. “We are implementing this strategy and putting the company in a stronger position.”

A similar move by Bank of America to separate the CEO and chairman roles also failed after receiving 31% of shareholder votes, up from 26% last year.

At both banks, investors approved all management proposals, including those regarding executive compensation, while rejecting all shareholder proposals.

Support for resolutions calling for the separation of the roles of chairman and CEO in companies has averaged around 30% in recent years, according to the ISS.

Some analysts expected more support for these “independence presidency” resolutions this year due to the growing complexity of topics that consume business leaders’ time, including sustainability issues and of artificial intelligence.

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