Yesterday, at the Bank of America shareholders meeting, various pension funds and other dissident shareholders, led by labor unions and in particular SEIU, attempted to force Chairman and CEO Ken Lewis out of both his positions. (SEIU's pension funds own shares in B of A.) Lewis managed to hang on to his role as CEO, but 50.3 percent of shareholders voted to replace him as chairman of the company. Sez the Financial Times:
[T]he loss of the chairman title does not bode well for Mr Lewis. Last year, two former high-flying banking executives – Kennedy Thompson of Wachovia and Kerry Killinger of Washington Mutual – were stripped of their chairman titles and, shortly after, removed as chief executives as their institutions sagged under the weight of bad real estate loans.
SEIU objected to Lewis' reign for a variety of reasons: on a purely economic standpoint, Lewis has overseen a huge crash in the company's value; the company's high fee structure targets low- and moderate-income consumers of credit cards and mortgage loans; and the Bank has lobbied against the Employee Free Choice Act and other legislation while receiving government bail-out funds. There's also the -- surprisingly controversial -- idea that the board of directors should be independent from the management it oversees.
Between this, and the the United Autoworkers' large role on the boards of "new" Chrysler, Ford, and GM, it's starting to look like there is something of a trend in unions giving workers a stronger voice on the boards of major corporations.
-- Tim Fernholz
