Proposals for a CEO-chair split are rejected by Goldman Sachs and BofA shareholders
Goldman Sachs and Bank of America shareholders rebuffed proposals to separate the CEO and chairman roles at their respective banks on Wednesday, defying pressure from influential proxy advisers aiming to enhance corporate governance.
Proxy advisers Institutional Shareholder Services (ISS) and Glass Lewis had recommended shareholders endorse the proposals, advocating for the removal of Goldman CEO David Solomon and BofA CEO Brian Moynihan from their chairman positions.
Despite support from Norway’s $1.6 trillion sovereign wealth fund, one of the world’s largest investors, the majority of shareholders opted to maintain the status quo. Analyst Stephen Biggar from Argus Research noted that the vote signified shareholders’ satisfaction with company performance and executive compensation, signalling a reluctance to disrupt the current oversight structure. However, he acknowledged a growing momentum for the proposal, suggesting potential success in future years.
At Goldman’s annual shareholder meeting, the proposal by the National Legal and Policy Centre (NPLC) gained traction, receiving 33% of shareholder votes compared to 16% last year. NLPC’s Luke Perlot highlighted Solomon’s “poor decision-making” and emphasised the need for a counterbalance to executive power.
Despite the failed vote, Perlot expressed satisfaction with increased support while lamenting the lack of majority backing for the proposal. Both banks’ management proposals, including executive compensation, were approved by investors, while all shareholder proposals were rejected.
Goldman Sachs reiterated its commitment to its governance structure, emphasising the effectiveness of a strong lead Independent Director alongside the Chairman-CEO role. Solomon emphasised the firm’s strategic focus and performance, positioning the company for future strength.
Similarly, Bank of America’s attempt to separate the CEO and chairman roles faltered, receiving 31% of shareholder votes, slightly up from 26% last year. Analysts had anticipated stronger support for such resolutions this year given the growing complexity of issues faced by corporate leaders, such as sustainability and artificial intelligence.
