The vote to split the chairmanship and CEO roles at Bank of America (BAC) is so close that the bank is doing a recount.
So while we wait, check out this study, found by Matt Sticnoth, which suggests that in all likelihood Ken Lewis will prevail.
Just looking at the history of extremely close shareholder votes, the management usually finds a way to prevail — or at least a lot more often than a random sampling of close votes would otherwise suggest.
From the paper:
…Management sponsored proposals (the vast majority of which concern the approval of stock options or other bonus plans) are overwhelmingly more likely to win a corporate vote by a very small amount than to lose by a small amount– to a degree that cannot occur by chance. For example, management exceeded its necessary vote requirement by less than 1% almost 50 separate times in the dataset, while management missed the vote requirement by less than 1% only 5 times. Such a distribution should occur by chance less than 1 in 10 trillion times. These results indicate strong management influence on corporate voting of some form or another. Moreover, the results are not simply due to quorum requirements and shareholder indifference. Management enjoys these stunningly high rates of victory in elections even where the number of votes against the management sponsored proposal is extremely high.
In other words, when the going gets tough, management finds a pull it out.
So while we wait for the official results, this makes us pretty convinced that Lewis will survive.
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