Goldman Sachs and Bank of America Shareholders Reject Proposals to Split CEO and Chairman Roles

Shareholders at Goldman Sachs and Bank of America reject proposals to split CEO and chair roles, despite calls for improved governance in the banking sector.

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Goldman Sachs and Bank of America Shareholders Reject Proposals to Split CEO and Chairman Roles

Goldman Sachs and Bank of America Shareholders Reject Proposals to Split CEO and Chairman Roles

Shareholders at Goldman Sachs Group Inc. and Bank of America Corp. have voted against proposals to separate the roles of chair and chief executive at the banks during their annual meetings in 2024. The votes marked victories for David Solomon at Goldman Sachs and Brian Moynihan at Bank of America, who both currently hold the titles of chair and CEO.

At Goldman Sachs, the shareholder resolution to split the two jobs received a 33% favorable vote, about double the 16% support for a similar proposal a year ago, but still falling short of a majority. Proxy advisers Glass Lewis and Institutional Shareholder Services had recommended that shareholders vote for the separation of the roles.

Similarly, at Bank of America's virtual annual meeting, a proposal to divide the CEO and chairman roles held by Brian Moynihan was backed by only 31% of shareholders, despite proxy advisers recommending investors vote for the bank to separate the positions in an effort to improve governance. All of Bank of America's management proposals were approved by shareholders.

Both banks argued that they need the flexibility to determine the most effective board leadership structure. Bank of America stated that its shareholders have repeatedly affirmed that the board should retain this flexibility.

Why this matters: The pressure to split the CEO and chairman roles at major banks has increased since the 2008 financial crisis, with concerns raised about the concentration of power and decision-making. By the end of 2023, nearly 60% of S&P 500 companies had those roles split, and 76 companies made the change between 2010 and 2023.

The failed proposals at Goldman Sachs and Bank of America, backed by influential proxy advisers and Norway's sovereign wealth fund, indicate that the majority of shareholders are satisfied with the companies' performance and leadership, despite the concerns raised. Similar proposals will be voted on at other major banks like JPMorgan Chase and Citigroup this year, as investors continue to push for improved corporate governance and accountability in the banking sector.

Key Takeaways

  • Shareholders at Goldman Sachs and Bank of America rejected proposals to split CEO and chair roles.
  • The votes marked victories for David Solomon and Brian Moynihan, who currently hold both titles.
  • Proxy advisers had recommended shareholders vote for the separation of the roles.
  • Banks argued they need flexibility to determine effective board leadership structure.
  • Pressure to split CEO and chair roles has increased since 2008 financial crisis.