BofA shareholders gather for annual meeting
7 minutes ago
By IEVA M. AUGSTUMS
AP Business Writer
(AP:CHARLOTTE, North Carolina) Amid tight security and a growing number of protesters, Bank of America Corp. executives braced Wednesday for what was expected to be a contentious annual meeting.
The banking giant and its chairman and chief executive, Ken Lewis, have been under intense scrutiny in recent months after Bank of American became one of the biggest recipients of government support and acquired struggling investment bank Merrill Lynch & Co.
Some of the bank's big shareholders have been calling for Lewis to resign as chairman and CEO because of the Merrill acquisition and the precipitous drop in the company's stock price. Bank of America has fallen 42 percent since the beginning of the year, closing Tuesday at $8.15. But shares fell as low as $2.53 in late February.
A number of investment groups have campaigned for other shareholders to vote against the re-election of Lewis and other board members at Wednesday's meeting in a Charlotte theater. However, it is possible that at the meeting or at some point in the near future Lewis might lose his title as chairman while remaining CEO _ a change that has been made at other troubled companies.
Bank executives likely knew how the vote was going ahead of the meeting, but preliminary results weren't being released. The bank's proxy statement shows shareholders are voting on 11 different proposals, including one regarding limits on executive compensation _ a controversial topic for banks that received government funds.
Bank of America's board has said it supports Lewis.
On his way into the meeting, shareholder John Moore, of Charlotte, said, "I think now is the time for Mr. Lewis to resign. We thank him and the board for their service." Moore said he owns 18,000 shares in the bank.
On Tuesday, the California Public Employees' Retirement System said it would vote against re-electing all 18 Bank of America board members, including Lewis. CalPERS, the largest U.S. public pension fund, holds about one-third of 1 percent the bank's outstanding shares.
Charlotte-based Bank of America has received $45 billion in government aid as part of the Troubled Asset Relief Program, and additional guarantees backing hundreds of billions more in risky investments after it took over Merrill Lynch in January.
On Tuesday, two people familiar with the matter said the Bank of America and Citigroup Inc. will need to raise more capital if they can't convince regulators that "stress test" results were mistaken. Results of the tests, which are designed to determine if the banks can weather more economic turmoil, are expected to be released next week. BofA and Citi are preparing their appeals of the government's assessment, said the people, who spoke on condition of anonymity because everyone involved in the process has been ordered not to discuss it
The government helped orchestrate the acquisition of Merrill Lynch over the same weekend in September that another investment bank, Lehman Brothers, collapsed, setting off one of the most intense periods of the financial crisis.
Bank of America completed its purchase of Merrill Lynch on Jan. 1. Since then, Bank of America has been under pressure from shareholders about the deal, especially as Merrill Lynch reported a more than $15 billion fourth-quarter loss just weeks after the deal was completed. New York Attorney General Andrew Cuomo is investigating year-end bonuses paid to Merrill employees just before the deal was completed and whether investors were provided proper disclosures about BofA's acquisition of the investment bank.
According to testimony Lewis gave to Cuomo's office, the CEO tried to back out of the Merrill deal in December as losses at Merrill piled up. But, according to the testimony, he was pressured to complete it by high-ranking federal officials, including former Treasury Secretary Henry Paulson and Federal Reserve chief Ben Bernanke.
Copyright 2009 The Associated Press. All rights reserved.
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