Tag Archives: Dawn Dannenbring

Bank of America Shareholder Meeting – A Failure

The Bank of America Board of Directors was on the defensive yesterday. There were protestors gathered outside the annual general meeting; security was high; inside, the mood was testy. In his opening remarks, Chairman of the Board Chad Holliday flubbed an announcement about question and answer time, prompting a shareholder to interrupt the preliminaries; and when Q & A on shareholder resolutions began in earnest, CEO Brian Moynihan stuck to terse, one-sentence, boilerplate answers to most questions, until one stockholder stood up and asked for “more nuance and explanation” and “a more thoughtful response” to the owners’ questions. General applause ensued, but the dialogue did not really improve. In that respect, the meeting felt like a lost opportunity: the Board simply refused to engage.

There were six shareholder resolutions but (as the Q & A revealed) really just three big issues on shareholders’ minds: executive compensation, predatory mortgage and lending practices, and political contributions.

One shareholder seemed to sum up the feelings of many in the room when he said that “it’s a comedy” to be a Bank of America shareholder, given the gap between the stock’s performance and the compensation of its executives. Several people directly asked Brian Moynihan to forgo (or, as one shareholder put it, “deny”) his raise for the coming year. This came to a head in an exchange with one shareholder, who said that the issue really came down to where Moynihan’s “heart” is. “Do you love your neighbor as yourself? Are you going to turn down your raise?” Like a boy at his catechism, Moynihan parsed the question and said that he had been raised to love his neighbor as he loves himself (how could he say otherwise?), but when it comes to turning down his raise the answer is simply “no”; and then he repeated a few prepared phrases about how his own compensation is “aligned” with the Bank’s strategic goals. That was his gospel.

Still, shareholders urged the bank to consider the “injustice” in the world, and Bank of America’s part in it. Activist shareholder Dawn Dannenbring (whose appearance at a JP Morgan shareholder meeting I blogged about here) asked the Board to think about why they need to have heightened security at their shareholder meetings: “If you were a better corporate neighbor,” she remarked, “you wouldn’t have to be so scared.” To charges that it had “decimated” the communities where it did business, the Bank responded with a bland assertion: “the success of communities is equal to our success”; at one point Moynihan even muttered the phrase “good for America,” but it sounded as if he had never really warmed to that talking point, and his voice trailed off.

Some tried to appeal to the bank’s business sense: if Bank of America is seen “not as part of the solution but as causing the problem,” it runs a “reputational risk.” That’s putting it mildly. Others were not so restrained: “You’ve got to stop foreclosing on families,” exclaimed one shareholder; and a number of people rose during the Q & A and told their own stories about how the bank – their bank – had ruined them. Moynihan was patient and even compassionate with these share-owning customers, and told them they could talk to a B of A “teammate” on the spot, that very day, about their problems. But the crowd was repeatedly reminded that these individual cases – their own cases or the cases of family and friends – did not bear on the proposals they had assembled to vote on. This was a myopic response at best, as if behind each of these proposals there were not thousands, hundreds of thousands, millions of individual stories that need to be told, and that make up the big picture of the bank’s role in America.

While the bank is reluctant to open a dialogue on its role in society, it is aggressive in its bid for political power and social influence. And in the wake of Citizens United, the battle lines around political spending are being drawn. A proposal to prohibit all political spending from the corporate treasury – which I wrote about in a previous post — received just 4 percent of the vote, but the resolution still counts as an important first step. Another political spending proposal, requiring Bank of America to disclose all grassroots lobbying, fared much better, garnering about 30 percent of the vote (right around the 32.73 percent it gained last year).

Calls for disclosure of political spending are getting harder to ignore. And though prohibitions and other checks on spending still face an uphill battle, the resolution to stop political spending at least gave shareholders a chance to say a few words about the risks and uncertain outcomes of profligate political spending. Shareholders cited research (by Hadani and others) to support their position; but it is hard to say whether this made any impression whatsoever on the Board. If so, they weren’t going to let it show. They just seemed to want to get the whole thing over with. They had not come to deliberate, or listen or learn. They had come to defend. And that is why the 2012 Bank of America shareholders’ annual meeting should be reckoned a failure.

God and Mr. Dimon

While protestors at the JP Morgan Chase annual shareholders meeting in Columbus, Ohio braved the rain and faced off with police, inside the McCoy Center there was a remarkable exchange.

“As a person of faith, my God believes you shouldn’t take advantage of people when they are down,” said Dawn Dannenbring, of the community group Illinois People’s Action, addressing CEO Jamie Dimon. “Do you believe in the same God I believe in?”
Dimon answered: “That’s a hard one to answer.”

Of course, whether Jamie Dimon believes in a merciful God is a matter for him to decide and settle with his own conscience. Whether he believes in the same merciful God Dawn Dannenbring believes in is probably impossible to answer, or would, at least, require an extended theological discussion. And neither Dimon nor Dannenbring seemed ready to have that conversation. The JP Morgan Chase CEO obviously wanted to get on with the business of the shareholder meeting. And Dannenbring was less interested in knowing the secrets of Mr. Dimon’s heart than in playing Portia to his Shylock and shaming him.

Dannenbring’s motives aside, her question echoed other recent criticism of Mr. Dimon. On the blog Credit Slips, Adam Levitin attacked Dimon a couple of weeks ago for having no concept of mercy after Dimon said, in an exchange with CNBC’s Maria Bartiromo, that some people find themselves in better financial circumstances after foreclosure, and that, moreover, foreclosure is a form of debt relief: “Giving debt relief to people that really need it, that’s what foreclosure is.” Levitin was baffled:

For real?… “Debt relief” requires a forgiveness of debt. It’s a gift, not an exchange. There’s no quid pro quo….I can’t fathom how Dimon conceives of foreclosure as an act of mercy.

Over at Naked Capitalism, Yves Smith picked up on Levitin’s criticism: “the Dimon moral calculus is fascinating. If foreclosures are kind, is it even kinder to restore debtors’ prisons? After all, those people who lose their homes would be assured of getting shelter.” If today’s bankers believe in God, Smith says, they must believe in the angry God of the Old Testament, the same God who strips Job of his possessions and reduces him to sackcloth and ashes.

That Jamie Dimon is now being put in the company of Goldman’s Lloyd Blankfein and other tight-fisted ministers of vengeance is all the more remarkable because Dimon is regularly held up in management literature (like this Introduction to Leadership[pdf]) and in the business press as an example of great leadership.

“Outspoken, profane, fearless,” as one CNN Money profile describes him, Dimon is regularly praised for having steered JP Morgan Chase away from the subprime crisis, exiting the business of securitizing subprime mortgages at the height of the boom and forgoing both Structured Investment Vehicles and Collateralized Debt Obligations, or CDOs. Notably, neither New York Attorney General Eric Scheiderman nor Senator Carl Levin, who are independently investigating criminal wrongdoing in the subprime crisis, have named Dimon or JP Morgan Chase as a target of their investigations. Even Matt Taibbi has focused his pieces for Rolling Stone on Goldman, not JP Morgan Chase.

For some, no doubt, it is a question of degree: while certain CEOs led their banks into criminal activity, others offered little relief to those caught up in the mortgage crisis. Perhaps both are to blame, and thanks to Levin and Schneiderman at least some of the criminals will now face justice.

But rather than expect the CEO of a global bank to forgive debts, or bear witness to his faith in a merciful God, I would prefer to know what constructive steps, if any, the banks are taking now to help the American middle class regain its footing and rebuild trust – not necessarily in God, but in the everyday workings of the American economy.

In other words, why ask for mercy when you can demand responsibility? I wish Maria Bartiromo would press Mr. Dimon in their next interview to talk specifically to this point, and to articulate clearly the obligations his company has, and the steps his bank will take, to help restore — what else to call it? — the common wealth. The exchange might be one for the leadership books.