The dominant firm telling big investors how to vote on questions put to shareholders has recommended that that its clients vote “Against” Bank of America Chairman and CEO Kenneth D. Lewis at the upcoming vote for the bank’s board of directors. It also recommended firing other lead director O. Temple Sloan and four other directors off the board.
The principal complaint of ISS/Risk Metrics, of course, is the ridiculous acquisition of Merrill Lynch.
From ISS’s statement:
The absence of board leadership and a willingness to curb Mr. Lewis’ penchant for empire-building led to BAC’s entry into a risky transaction following an abbreviated due diligence process. The board also failed in its duties to shareholders by neglecting to disclose to its own shareholders information on Merrill’s growing Q408 losses before the Dec. 5, 2008 shareholder vote on the merger.
…Therefore, at this time we are recommending that shareholders vote AGAINST directors in leadership positions who bore the most responsibility for the board’s failures and should be held most accountable, namely Mr. Lewis, lead director O. Temple Sloan, and members of the Asset Quality Committee, who failed to identify, disclose and address issues related to the acquisition of Merrill.”
Yesterday another leading proxy advisor, Proxy Governance, also recommended that shareholders vote against two directors because of the Merrill acquisition. Lewis escaped the negative recommendation only because he’s also the CEO. “Were he simply chairman, we would also recommend a withhold vote,” Proxy Governance said.
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