Brian Moynihan’s leadership is being questioned because three top executives at Bank of America had no idea that their request to repay the dividend was rejected by the Fed, according to the WSJ.
Last month, the Fed stopped Bank of America’s plans to repay shareholders just one cent per share in their tracks by rejected their request and saying essentially, BAC isn’t strong enough yet. The bank’s stock was off 3% by early morning after the firm filed with the SEC to alert shareholders to the Fed’s decision. After three days, the stock was off 4%.
The rejection was bad enough alone. Now add the internal strife it’s caused. Three top executives at Bank of America, Chief Financial Officer Chuck Noski, Chief Accounting Officer Neil Cotty and Head of investor relations, Kevin Stitt, found out about the Fed’s decision at the last minute.
Normally before filings, all executives are briefed. Instead, Noski and Cotty found out after Bank of America filed with the SEC. And Stitt found out the night before the firm filed with the SEC.
The “lack of communication” among top the execs “highlights questions about the management style of the relatively new bank chief,” according to the Wall Street Journal.
The exclusion of certain executives wasn’t deliberate, a company spokesman said. People who worked for Mr. Noski and Mr. Cotty participated in the drafting of the document, he added, including a senior member of Mr. Noski’s team.
Board chairman Chad Holliday said he is confident Mr. Moynihan is making good decisions as CEO and this incident doesn’t change his view. “He has done exactly what we were expecting him to do,” he said.
But some governance specialists said it is unusual for a public company to make such a regulatory filing without consulting the top finance and accounting executives.
For what it’s worth, Moynihan requested an internal investigation to discover what went wrong.
rumour is something less egregious, but similar, happened at Morgan Stanley recently. Apparently David Moore found out he would be leaving Morgan Stanley on CNBC.