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BofA board asks shareholders to vote down 3 investor proposals

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BofA board asks shareholders to vote down 3 investor proposals

Bank of America Corp.'s board advised shareholders to vote down three separate proposals to disclose the gender pay gap of employees and amend rules on calling special meetings and proxy access at the 2019 annual shareholders' meeting.

The first proposal, filed by Arjuna Capital LLC, said that while BofA has reported that female employees earn 99% of what male employees earn on an adjusted basis, that does not take into account how discrimination affects employment opportunities. Disclosing the median pay gap will allow the company to address structural biases that harm women, the proposal argues.

BofA's board said issues on gender representation and gender pay equity should be addressed separately. The board also added that the median pay gap, which is not adjusted for various factors such as work roles, performance, work experience and geographical locations, is misleading and that they have already provided disclosures on metrics based on gender pay equity and gender pay representation, which were recommended by outside experts. BofA's board also said that more than 50% of its global workforce is female and more than 45% of its U.S.-based employees are people of color.

The second proposal, filed by Kenneth Steiner, said shareholders should have the ability to authorize actions through written consent, which allows shareholders to raise issues outside of scheduled meetings. The proposal argues that allowing directors to be elected through written consent will allow the board to tackle the issue of its current share repurchase plan, which can be a sign of the company taking a short-term view of its growth, and the need to improve board management.

BofA's board said all matters that need shareholder approval should be voted on by all shareholders, and argued that matters proposed through written consent might not be communicated to all stockholders. The board also pointed out that shareholders with a 10% stake can call special meetings and those that own a 20% stake can nominate a board director candidate through the existing proxy access rules, which require as few as 2.4 billion shares to approve an action instead of the 4.8 billion shares required under the written consent proposal.

The third proposal, filed by John Chevedden, said shareholder proxy-access director candidates should not need to reach a certain quota of shareholders' votes to be eligible for re-nomination. The proposal argues that the current 20% threshold can prevent candidates from getting elected to the board even if they are truly qualified. However, BofA's board said current rules prevent repetitive nomination of candidates who cannot garner support and that the 20% threshold is lower than at other companies in the S&P 100.