Goldman Sachs and Bank of America shareholders reject proposals to separate chair and CEO roles

By Steve Gelsi

Votes mark victories for Goldman's David Solomon and Bank of America's Brian Moynihan

Shareholders at annual meetings on Wednesday rejected separate proposals at Goldman Sachs Group Inc. and Bank of America Corp. to separate the roles of chair and chief executive at the banks.

The votes at the annual meetings marked victories for David Solomon at Goldman Sachs (GS) and Bank of America's (BAC) Brian Moynihan, who both hold the titles of chair and chief executive.

The shareholder resolution to split the two jobs received a 33% favorable vote at Goldman Sachs and 31% approval at Bank of America, falling short of a majority in both cases.

Shareholders at Goldman Sachs brushed aside a recommendation from proxy advisers Glass Lewis and Institutional Shareholder Services to vote for separation of the roles.

However, the 33% shareholder vote at Goldman Sachs in support of the separation of roles was about double the 16% favorable vote on a similar proposal a year ago.

Luke Perlot of the National Legal and Policy Center told the company at the shareholder meeting that a separate chair at the bank would have acted as a "serious counterweight" to Solomon's power.

"We are pleased that voting in support doubled from last year. We are disappointed that these clear examples of excesses did not convince a majority to support our proposal," Perlot said in a statement after the meeting.

As evidence that the company should change its governance structure, ISS cited Solomon's decision to move Goldman Sachs into the consumer-banking business, which resulted in the loss of billions of dollars after the bank pared back the business last year.

Goldman Sachs had asked shareholders to vote against the measure to separate the roles.

"A combined chair-CEO structure provides our firm with a senior leader who serves as a primary liaison between our board and management and as a primary public face of our firm," Goldman Sachs said on page 27 of its proxy statement. "This structure demonstrates clear accountability to shareholders, clients and others."

A statement from Bank of America said: "Our shareholders have repeatedly affirmed that the board should retain the flexibility to determine the most effective board leadership structure based on applicable circumstances and needs."

At Bank of America, the voting results were not far off the tallies in 2017, 2018 and 2023, when similar measures were proposed.

In 2015, Bank of America shareholders approved bylaws that gave the board the flexibility to determine leadership structure, including appointing a lead independent director when the chair is not an independent director.

Currently, Lionel Newell III is Bank of America's lead independent director.

Wells Fargo & Co. (WFC) and Citigroup Inc. (C) hold their annual meetings on April 30.

JPMorgan Chase & Co. (JPM) holds its annual meeting on May 21. Shareholder proposal No. 5 in the bank's proxy statement also calls for the separation of the chair and CEO roles.

Morgan Stanley's (MS) shareholder meeting takes place on May 23.

-Steve Gelsi

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04-24-24 1541ET

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