UPDATE: This article, originally published at 9:36 a.m. EDT Wednesday, May 6, has been updated to reflect shareholder votes at Bank of America's annual meeting.
NEW YORK (TheStreet) -- Bank of America (BAC) investors didn't object to the person chosen to fill the roles of chairman and CEO last fall. What bothered them was that the bank's board didn't consult them when it decided to reunite the two jobs, reversing a binding shareholder vote made during the financial crisis.
In the end, their objections, along with recommendations from two proxy-advisory firms to vote against board members who backed the change, were strong enough to convince the Charlotte-based bank to give investors a vote on it. Just not at today's annual meeting.
"We were getting fairly consistent feedback that shareholders were upset with the process" although they seemed fine with CEO Brian Moynihan serving as chairman, said Lawrence Di Rita, a Bank of America spokesman. To address that, the bank said in a regulatory filing on Monday that shareholders will get a chance to weigh in no later than the company's 2016 annual meeting.
The top jobs at Bank of America had been split since 2009, when investors stripped then-CEO Kenneth Lewis of the chairman's title. That decision followed his acquisition of investment bank Merrill Lynch near the end of 2008, at the height of a financial crisis that froze credit and wiped out about half the value of equities markets. After the deal was completed, Merrill announced $15 billion in fourth-quarter losses.
In reversing the shareholder vote, Bank of America maintained that it had passed narrowly, with a 50.3% majority, and reflected investor sentiment during a distressed time. Conditions now are different, the bank said in its proxy filing for today's meeting in Charlotte.
Today, not only are 13 of the bank's 15 directors independent, the board attempted to adhere to shareholder wishes by creating the role of lead independent director for periods in which the roles of chairman and the CEO are held by the same person, the company said.
Shareholders, who were in a position to punish the bank, saw the matter differently. The recommendation from advisory firms Institutional Shareholder Services, or ISS, and Glass Lewis against four directors who backed the change could have cost them their posts, since winners are determined based on a majority of votes cast.
The four identified by ISS -- Sharon Allen, Frank Bramble, Thomas May and Lionell Nowell, all of whom sit on the board's corporate governance committee -- were ultimately re-elected on Wednesday, along with the bank's nine other nominees.
Two large investors, New York City Pension Funds and the California State Teachers' Retirement System, or CalSTRS, say they still want the chairman and CEO roles to be separate. They chose not to pursue putting the board's decision to a shareholder vote after Bank of America changed its policies to give investors with large enough holdings the ability to nominate future board members.
"A number of stockholders have expressed the view that stockholders should have been given the opportunity to vote," Moynihan and lead independent director Jack Bovender said in a letter to investors included in Monday's filing. "We appreciate the candor with which stockholders have shared their insights, both in support of the decision and in expressing reservations about the process."
The timing of the bank's change of course is somewhat suspect, said David Yermack, a professor at NYU's Stern School of Business.
"This a thinly veiled attempt to avoid hostile questioning," Yermack said, pointing out that previous Bank of America shareholder meetings were criticized for limiting time for shareholder questions.
And while merging the roles is consistent with the structure of other large U.S.-based banks, including JPMorgan Chase (JPM), Goldman Sachs (GS) and Wells Fargo (WFC), many European banks split the roles. Among them are Spain's Banco Santander (SAN), the U.K.'s Barclays (BCS) and Switzerland's Credit Suisse (CS).
"In Europe, the chairman is rarely a potential competitor," Yermack said. "We have a much more ruthless brand of management in-fighting than Europe."
Management pay was also among the items considered by investors during Wednesday's meeting. Shareholders approved total 2014 compensation of $13 million for Moynihan, $14 million for Chief Operating Officer Thomas Montag and $10.8 million for Chief Financial Officer Bruce R. Thompson.