Shareholder resolutions to strip Bank of America's Brian Moynihan (left) and Goldman Sachs' David Solomon of their chairman titles failed on Wednesday. Supporters at BofA say it's good corporate governance to have the chairman and CEO be separate people and complained about the company's stock price. Critics of Solomon cited an "urgent need for an independent chairman to ensure accountability and uphold the firm's commitment to a respectful workplace."
During annual meetings held Wednesday — Bank of America's was virtual while Goldman's was both in-person and virtual — shareholders also vetoed proposals that would have required the banks to disclose more information about their energy financing. And at Goldman Sachs, another attempt to get the firm to divulge more details about its pay gaps failed to win majority approval.
The proposals, and similar submissions filed at other banks, have been among the most watched measures this proxy season. The debate about separating the chair and CEO roles, which has arisen time and again at different banks, has been especially heated this spring, with the proxy advisory firms Glass Lewis and Institutional Shareholder Services backing the proposals.
About 31% of Bank of America's shareholders voted in favor of giving CEO Brian Moynihan's role as chair to someone else, according to preliminary results. At Goldman Sachs, the approval percentage was a bit higher at about 33%.
Although the measures didn't pass, they gained traction from last year when about 26% of BofA shareholders and about 16% of Goldman shareholders voted in favor of splitting the roles.
At Goldman Sachs' meeting in Salt Lake City, Chairman and CEO David Solomon faced scathing criticism from the National Legal and Policy Center, the lead filer of the proposal calling for an independent chair. Under Solomon's watch, the $1.7 trillion-asset company has been mired in "controversies and challenges" that have affected its "reputation and potentially its long-term stability," Luke Perlot, associate director of the Corporate Integrity Project at NLPC, said during his presentation at the meeting.
Solomon's "poor decision-making led to substantial losses in the company's retail banking division," which could have been "mitigated" by an independent chair, Perlot said. Further, the company has "faced significant challenges related to workplace culture," such as allegations of sexual harassment and an uptick in the number of female leaders who have exited, he added.
Perlot said Goldman risks "normalizing a culture of sexual discrimination" without an independent chairman who could demand accountability.
The organization is "disappointed that these clear examples of excesses did not convince a majority to support our proposal," Perlot said in a statement following the voting results.
The measure is eligible to be resubmitted for the 2025 proxy season. But it's too early to say if that will happen, said Paul Chesser, director of the Corporate Integrity Project at NLPC.
"A lot can happen between now and then," Chesser said in an email Wednesday afternoon.
In response to the comments made about Solomon, Goldman Sachs said in an email:
"Almost anyone can take the mic at a public shareholder meeting and say whatever they want … We're proud of our work to create an inclusive and supportive environment."
Both Goldman and Bank of America have argued that they don't need to separate the chair and CEO roles, in part because they each have an independent "lead director" on their boards who can be a counterbalance to the chairman-CEO. In its recommendation against the proposal, Bank of America said that shareholders have repeatedly supported the board's flexibility in being able to choose the leadership structure that's most effective, depending on its needs.
But "a lead director is no substitute for an independent board chairman, with the current CEO serving as chair," according to Glenn Beatty, who presented the chair-CEO separation proposal during Bank of America's meeting.
"This means giving up a substantial check-and-balance safeguard that can only occur with an independent board chairman," he added.
JPMorgan Chase shareholders will get their turn to vote on a chair-CEO split proposal in May.
Also on Wednesday, Bank of America and Goldman Sachs shareholders voted on whether the firms should disclose their energy supply financing ratios, which measures a company's level of financing for low-carbon energy versus fossil fuels. Both submissions failed to pass, with 26% of shareholder approval at Bank of America and 29% of shareholder approval at Goldman Sachs.
In both cases, the proposals were submitted by the New York City Comptroller and three New York City pension funds. In a recorded statement played at Bank of America's meeting, New York City Comptroller Brad Lander called on management to reconsider their decision not to divulge the ratio, saying investors "need more information about the bank's financing of fossil fuels."
JPMorgan and Citigroup recently agreed to disclose the ratio after being pressured by the comptroller. Morgan Stanley shareholders will have their say on a similar proposal in May.
At Goldman Sachs, shareholders voted for the second consecutive year on a measure that would require the firm to disclose more information about pay gaps across race and gender.
The measure, of which about 30% of shareholders voted in favor of, called for Goldman to disclose two separate metrics — statistically adjusted pay gaps and the unadjusted median pay gap — that would show the differences in pay both between men and women and between minority and nonminority employees. Goldman has argued that it has already committed to disclosing more information about its gender and race pay gaps on an adjusted basis annually.
The proposal was filed by Newground Social Investment, a registered independent advisor in Seattle, on behalf of its clients. It was filed amid heightened scrutiny about the lower numbers of female executives at Goldman and follows Goldman's agreement last year to settle a gender-bias lawsuit for $215 million.
In March, the investment banking giant issued a pay equity statement. Its analysis of 2023 compensation found that the median pay for women across its organization is 99% of the median pay for men. In addition, it determined that the median pay for racial and ethnic minorities in the U.S. is 99% of the median pay for white employees, according to the statement.
Despite Wednesday's voting results, Newground is hopeful for more talks with Goldman.
"Shareholders sent Goldman a strong message today in favor of broad-based and standardized pay gap reporting," Bruce Herbert, the founder and chief executive, said in an email after the votes were tallied.
"Considering a 30% vote in light of the number of shares under management's influence … we look forward to future dialogue with the company to help it improve its standing."
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