CHARLOTTE, N.C. _ Bank of America chief executive Ken Lewis and his board of directors face significant opposition heading into a shareholders' meeting on Wednesday, but experts and activists say the bank officials have one major advantage: The rules of the game are in their favor.
Lewis and all his directors must stand for re-election at the meeting, but a big chunk of the votes will be cast by stockbrokers on behalf of their clients, and they typically back management. Also, companies have the right to adjourn their annual meetings so they can drum up more votes in their favor. And even if shareholders vote out a director, the board has the final say on whether that director has to go.
"Across the country, the playing field is slanted against shareholders and in favor of incumbent management," said Stephen Davis, a senior fellow at Yale University's Millstein Center for Corporate Governance.
However, one recent rule change by the bank makes the director elections a little more of a horse race. In 2006, in response to a popular shareholder proposal, Bank of America said its directors need a majority vote to win re-election. Under the old "plurality" standard, a director theoretically could win with one vote.
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The outcome of Wednesday's annual meeting is significant for the bank's direction and for Charlotte, where Bank of America is a major employer and civic leader.
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