The proxy advisory firm Glass Lewis is urging Bank of America shareholders to vote to support a proposal that would force the nation's second-largest bank to fully disclose its lobbying expenses and activities.
In a 37-page report, published Sunday, Glass Lewis voiced support for a proposal that would allow shareholders to submit action by written consent at annual meetings, rather than being required to attend in person; and recommended that shareholders vote against the re-election of board member Thomas May.
The measures are to be voted on at B of A's annual meeting May 6. The bank has recommended that shareholders vote against the lobbying and written consent proposals and is supporting May's re-election.
In its report, Glass Lewis said that Bank of America "has not provided shareholders sufficiently accessible disclosure regarding its political spending and lobbying and the company lags its peers regarding disclosure of political spending, lobbying, and associated activities."
If agreed to by shareholders, the proposal would require the company to disclose annually its policies and spending on direct, indirect, and grassroots lobbying efforts, as well as membership in and payments to tax-exempt organizations that write and endorse legislative bill proposals.
"Absent a system of accountability," the proponent's perspective of Glass Lewis's report reads, "[Bank of America] assets could be used for objectives contrary to its long-term interests." According to the report, the bank spent $5.87 million on federal lobbying in 2012 and 2013, including lobbying efforts to repeal regulations against separating swaps units the so-called 'swap pushout' provision of the Dodd-Frank financial reform bill.
B of A discloses its memberships to trade associations that result in annual payments of $25,000 or more. It has also maintained that it does all lobbying with clearance from its legal compliance department.
The bank declined to comment on Glass Lewis' recommendations.
The proxy advisory firm also supports a proposal that would allow shareholders to submit action on "important issues" by written consent at the annual meeting. A similar resolution reached 47% of the shareholder vote at a 2011 meeting; Glass Lewis cites the removal of underperforming directors at Wet Seal, a women's clothing retailer, with shareholder written consent in 2012 as reason to adopt the proposal for Bank of America.
"Glass Lewis strongly supports the right of shareholders to effect change at their portfolio companies including by acting by written consent," the report reads.
Finally, Glass Lewis opposes the re-election of May, arguing that should be removed for supporting the decision to recombine the chairman and chief executive positions, which had been separated for several years after the financial crisis. CEO Brian Moynihan was given the additional title of chairman in October.
"Glass Lewis views an independent chairman as better able to oversee the executives [Bank of America] and set a pro-shareholder agenda without management and, consequently, without conflicts that an executive insider or affiliated director might face."
The Wall Street Journal has reported that Institutional Shareholder Services also opposes May's re-election, as well as those of Sharon Allen, Frank Bramble, and Lionel Nowell.