The New York City Comptroller's office, representing pension funds that own shares in Bank of America Corp., wants the bank's board to review the company's controls for loan modifications, foreclosures and securitizations.
The request, disclosed Wednesday in a regulatory filing, is one of eight shareholder proposals that will be voted on at BofA's annual meeting May 11 in Charlotte, N.C. The board has advised shareholders to vote against all eight proposals, which range from limiting relocation benefits for senior executives to giving shareholders an annual list of certain employees who have worked for the government in the past five years.
The New York City pension funds hold of 29.7 million shares of BofA. The bank's mortgage servicing practices are already under intense scrutiny, as BofA and several other large servicers await a resolution of an investigation by all 50 state attorneys general and inquiries by other government agencies.
"We believe the [board's] audit committee should act proactively and independently to reassure shareholders that the company's compliance controls are robust," the comptroller said. The proposal calls for BofA to report the audit's findings by Sept. 30.
In urging shareholders to vote against the proposal, BofA's board said the "company has already taken significant steps to ensure that appropriate internal controls are in place" and that it "has already provided extensive public disclosure regarding the requested information, which makes the report sought by the proposal unnecessary."
Other shareholder proposals include one seeking information on the bank's policy concerning the use of collateral on all over-the-counter derivatives trades.
Another seeks to prohibit any senior executive from receiving a benefit that would prevent that executive from realizing a loss on the sale of his or her home in a relocation. Shareholder CtW Investment Group notes that the bank had provided Barbara Desoer, head of B of A's mortgage division, with such a benefit when she relocated in December 2008.
"We are concerned home-loss protection programs like the one provided by BofA can confer a substantial benefit that has no link to performance," the group said.
And the noted gadfly Evelyn Y. Davis, who owns 2,423 shares of BofA common stock, is trying again to win approval for a proposal that would require the bank to furnish an annual list to shareholders of all employees with the rank of vice president and above who served in any government capacity in the previous five years. Last year, 12.1% of the shares voting were in favor of the proposal, according to the proxy filing.
