Risk & Compliance

Make BofA Disclose Lobbying Expenses, Glass Lewis Tells Shareholders

Absent improved accountability, bank assets could be used for objectives contrary to shareholder interests, the proxy advisor says.
Katie Kuehner-HebertApril 24, 2015

Shareholders should vote to force Bank of America to fully disclose its lobbying expenses and activities, says proxy advisory firm Glass Lewis.

The American Banker wrote Friday that Glass Lewis is urging the bank’s investors to support a proposal that 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. The vote is scheduled at the company’s annual meeting on May 6.

In its report to shareholders sent Sunday, Glass Lewis reportedly said that BofA “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.”

The company spent $5.87 million on federal lobbying in 2012 and 2013, including lobbying efforts to repeal Dodd-Frank regulations against separating swaps units, according to Glass Lewis.

“Absent a system of accountability,” BofA’s “assets could be used for objectives contrary to its long-term interests,” the firm wrote.

BofA is opposing the proposal. It says it already discloses its memberships to trade associations that result in annual payments of $25,000 or more, and all of its lobbying activities are cleared by its legal compliance department, according to American Banker.

Glass Lewis is also supporting two other proposals before the shareholders: allowing shareholders to submit action by written consent at annual meetings, rather than being required to attend in person, and allowing them to submit action on “important issues” by written consent at the annual meeting.

The advisory firm also recommended that shareholders vote against the re-election of board member Thomas May because he supported the decision to recombine the chairman and chief executive positions. The roles had been separated for several years after the financial crisis until 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 and set a pro-shareholder agenda without management and, consequently, without conflicts that an executive insider or affiliated director might face,” the firm wrote.