CtW Investment Group Urges Bank of America Board to Eliminate Home Loss Payouts for Top Executives

Company Moves to Block Shareholder Vote on Discredited Executive Subsidies

WASHINGTON, Feb. 3, 2011 /PRNewswire/ -- The CtW Investment Group sent a letter yesterday calling on Bank of America (NYSE: BAC) board Chairman Charles Holliday to stop the discredited practice of providing payouts to senior executives to shield them from potential losses in the sale of their homes.  Citing the mounting investor and public backlash over BofA's mortgage and foreclosure practices, CtW urged the board to recognize that such payments "insulate a narrow set of executives from the economic facts of life even while Bank of America's own customers struggle to pay their mortgages as a result of the housing market collapse and broader financial crisis."  CtW urged the board to head off BofA management's misguided attempt to use the SEC to disenfranchise shareholders and block a shareholder proposal on the topic.  

As outlined in CtW Investment Group's letter and shareholder proposal:

• Bank of America's board is already under fire from investors concerned about risks related to improper foreclosure practices, including a $432 billion coalition of public pension systems led by New York City Comptroller John C. Liu on behalf of the five NYC Pension Funds, calling on the Bank of America board and other bank directors "to immediately undertake independent examinations of the banks' mortgage and foreclosure practices." A new lawsuit filed by TIAA- CREF, New York Life and a dozen other institutional investors in late January alleges widespread fraud in Countrywide's mortgage practices.
• Other companies, including US Airways, Delta Air lines, and Sysco, have eliminated such home loss protection/reimbursement practices.
• CtW Investment Group filed a shareholder proposal for the April 2011 annual meeting in response to a home loss subsidy offered to the President of BofA's Home Mortgage division and the very executive overseeing the Countrywide Financial integration. This agreement was in addition to a $3.6 million relocation and tax gross-up package offered to the executive.
• In January, BofA counsel sought approval from the SEC for its attempt to prevent a shareholder vote on the packages claiming they were "ordinary business" and comparing the potentially multi-million dollar executive payouts to providing employees with a Blackberry, laptop computer or a gym membership.

Given Bank of America and Countrywide's role in the mortgage meltdown and subsequent financial crisis, "for the Board to allow management to proceed with its attempt to prevent a vote on the practice would not only disenfranchise shareholders, it would demonstrate a dangerous insensitivity to our Company's customers," wrote William Patterson, Executive Director of the CtW Investment Group.

The CtW Investment Group first raised significant concerns regarding corporate governance problems at Bank of America in 2009 when CtW initiated the first challenge to the re-election of then-Bank of America directors Kenneth Lewis, Temple Sloan, and Thomas Ryan following the disastrous acquisition of Merrill Lynch.  The Investment Group's shareholder proposal concerning home loss subsidies, February 1 letter to the SEC, and February 2 letter to Charles O. Holliday, Jr. Chairman of the Board are available at: http://ctwinvestmentgroup.com/.

** Note: For additional information or comment please contact Rosanna Landis Weaver at [email protected] or visit www.ctwinvestmentgroup.com. **

SOURCE CtW Investment Group