DEF 14A 1 d839807ddef14a.htm DEF 14A DEF 14A
Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

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Exchange Act of 1934 (Amendment No.    )

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Bank of America Corporation

 

(Name of Registrant as Specified in its Charter)

 

 

 

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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Table of Contents

LOGO


Table of Contents

March 9, 2020

 

Letter from our Chairman and

Chief Executive Officer

   

Letter from our

Lead Independent Director

 

LOGO

 

Dear Fellow Shareholders:

 

We are pleased to invite you to the 2020 annual meeting of shareholders, to be held April 22, 2020 at 10:00 a.m., Eastern time, at the Hilton Charlotte Center City on 222 East Third Street in Charlotte, North Carolina.

 

During the meeting, we will provide you with further updates on the company and how Responsible Growth delivered for shareholders in 2019. It’s also a good opportunity for us to hear directly from you.

 

Your voice and your vote are important. For the 2020 annual meeting of shareholders, Bank of America again will make a $1 charitable donation for every shareholder account that votes.

 

This year, we will make contributions to Water.org. Your voting participation in the 2019 annual meeting of shareholders resulted in our contributing $1.0 million to the American Red Cross.

 

Please read the proxy materials and follow the voting instructions to ensure your shares are represented at the meeting.

 

Sincerely,

 

 

LOGO

 

Brian T. Moynihan

Chairman and Chief Executive Officer

   

 

LOGO

 

Dear Fellow Shareholders:

 

The independent directors and I join Brian in inviting you to attend our company’s 2020 annual meeting of shareholders.

 

The Board values input from our shareholders as the company executes our long-term strategy. As the Board’s Lead Independent Director, I meet regularly with investors. I share investors’ viewpoints with the Board, and that input enhances our decision-making.

 

During 2019, our dialogue again covered broad-ranging topics, including the company’s financial performance; the Board’s governance practices and composition; the Board’s role in strategic planning, risk management, and overseeing the company’s Responsible Growth execution; the company’s environmental and social initiatives, including human capital management; and my role as Lead Independent Director.

 

So that all shareholders have the opportunity to hear directly from our Board members, video interviews of each director discussing our company’s governance practices and what Responsible Growth means to us are available on our annual meeting website at https://about.bankofamerica.com/annualmeeting.

 

I encourage you to read our 2020 Proxy Statement, our 2019 Annual Report, and the other proxy materials. I also encourage you to read our inaugural Human Capital Management Report published at the end of 2019, also available on our annual meeting website.

 

Our Board remains committed to building long-term value in the company and returning excess capital to our shareholders. On behalf of the directors, I join Brian and the management team in thanking you for choosing to invest in Bank of America.

 

Sincerely,

 

 

LOGO

 

Jack O. Bovender, Jr.

Lead Independent Director


Table of Contents

NOTICE OF 2020 ANNUAL MEETING OF SHAREHOLDERS

 

LOGO

       Date and Time  

LOGO

       Place   

LOGO

       Webcast
  

 

April 22, 2020

10:00 a.m., Eastern time

  

 

Hilton Charlotte Center City

222 East Third Street

Charlotte, North Carolina 28202

  

 

As in prior years, a live audio webcast of our annual meeting will be available. That and other important information, including any updates about our annual meeting, are available at our annual meeting website (https://about.bankofamerica.com/annualmeeting)

Matters to be Voted on:

 

 

Electing the 17 directors named in the proxy statement

 

 

A proposal approving our executive compensation (an advisory, non-binding “Say on Pay” resolution)

 

 

A proposal ratifying the appointment of our independent registered public accounting firm for 2020

 

 

Shareholder proposals, if they are properly presented at our annual meeting

 

 

Any other business that may properly come before our annual meeting

Record date:

Bank of America shareholders as of the close of business on March 2, 2020 will be entitled to vote at our annual meeting and any adjournments or postponements of the meeting.

Your vote is very important:

Please submit your proxy as soon as possible by the Internet, telephone, or mail. Submitting your proxy by one of these methods will ensure your representation at the annual meeting regardless of whether you attend the meeting.

To express our appreciation for your participation, Bank of America will make a $1 charitable donation to Water.org on behalf of every shareholder account that votes.

Please refer to page 85 of this proxy statement for additional information on how to vote your shares and attend our annual meeting.

 

We intend to hold our annual meeting in person. However, we are actively monitoring the coronavirus (COVID-19); we are sensitive to the public health and travel concerns our shareholders may have and the protocols that federal, state, and local governments may impose. In the event it is not possible or advisable to hold our annual meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting solely by means of remote communication. Please monitor our annual meeting website at https://about.bankofamerica.com/annualmeeting for updated information. If you are planning to attend our meeting, please check the website one week prior to the meeting date. As always, we encourage you to vote your shares prior to the annual meeting.

By order of the Board of Directors,

 

 

LOGO

Ross E. Jeffries, Jr.

Deputy General Counsel and Corporate Secretary

March 9, 2020

Important notice regarding the availability of proxy materials for the annual meeting of shareholders to be held on April 22, 2020:

Our 2020 Proxy Statement and 2019 Annual Report to shareholders are available at https://about.bankofamerica.com/annualmeeting.

 


Table of Contents

Proxy statement summary   

 

 

PROXY STATEMENT SUMMARY

How to vote your shares

You may vote if you were a shareholder as of the close of business on March 2, 2020.

 

 

LOGO

  

 

Online

www.proxyvote.com

 

 

LOGO

  

 

By Mail

Complete, sign, date, and return your proxy card in the envelope provided

 

LOGO

  

By Phone

Call the phone number located on the top of
your proxy card

 

  LOGO   

In Person

Attend our annual meeting and vote by ballot

 

Your vote is important

Your vote will change lives with safe water. Bank of America will make a $1 charitable donation to Water.org on behalf of every shareholder account that votes.

 

Water.org is a global non-profit organization that helps those in need get access to safe water and sanitation through affordable financing, such as small loans. Today, 785 million people lack access to safe water and 2 billion people lack access to a toilet. Water is the best investment the world can make to reduce disease, increase family income, keep girls in school, and give families a brighter future.

      LOGO

Bank of America is proud to be a close philanthropic partner of Water.org. Since 2011, Bank of America has partnered with Water.org by making $4.25 million in philanthropic investments to help more than 400,000 people across India and Brazil gain access to improved water and sanitation, and $5 million in a zero-interest loan to its sister organization, WaterEquity, to further accelerate financing for water and sanitation.

 

By voting, you can join our efforts and share in successes like these—individuals and institutions harnessing the power of capital markets to do good—to empower people with safe water and the hope, health, and opportunity that flow from it.

 

Proposals for your vote

  

Board voting recommendation  

 

Page

 

1.    Electing Directors

  

 

LOGO   FOR each nominee

 

 

2

 

2.    Approving Our Executive Compensation
(an Advisory, Non-binding “Say on Pay” Resolution)

  

 

LOGO   FOR

 

 

 

46

 

 

3.    Ratifying the Appointment of Our Independent Registered Public Accounting Firm for 2020

  

 

LOGO   FOR

 

 

 

72

 

 

4-7.   Shareholder Proposals

  

 

LOGO   AGAINST

 

 

74

If you are a beneficial (or street name) holder and you would like to vote in person at the meeting, you must also present a written legal proxy from the broker, bank, or other nominee. See “Voting and other information” on page 85 for more information on voting your shares.

To review our 2020 Proxy Statement, 2019 Annual Report, and other information relating to our 2020 annual meeting online, go to https://about.bankofamerica.com/annualmeeting.

Annual meeting admission

Annual meeting admission is limited to our registered holders and beneficial owners as of the record date and persons holding valid proxies from these shareholders. Admission to our annual meeting requires proof of your stock ownership as of the record date and valid, government-issued photo identification. Security measures may include bag, metal detector, and hand-wand searches. The use of cameras, recording devices, phones, and other electronic devices is strictly prohibited. See “Voting and other information—Attending our annual meeting” on page 87. If you are planning to attend our annual meeting, please check our annual meeting website at https://about.bankofamerica.com/annualmeeting for updated information one week prior to the meeting date.

 

2020 PROXY STATEMENT      i


Table of Contents

   Proxy statement summary

 

 

Strategic objectives

 

 

 What would you like the power to do?

 

At Bank of America, we ask this question every day of all those we serve. It is at the core of how we live our values, deliver our purpose and achieve Responsible Growth.

 

 

Our values

 

  Deliver together

 

  Act responsibly

 

  Realize the power of
our people

 

  Trust the team

 

 

Our purpose

 

To help make financial lives
better, through the power of
every connection

  

 

Responsible growth

 

  We must grow and win
in the market – no excuses

 

  We must grow with our customer-focused strategy

  

 

 

 

  We must grow within
our risk framework

 

  We must grow in a sustainable manner

Eight lines of business—how we serve the core financial needs of people, companies, and institutions

 

LOGO

 

2019 Company Performance — Responsible Growth

($ in billions, unless otherwise indicated)

 

   

GROW AND WIN IN THE MARKET — NO EXCUSES

 

2019 

 

CHANGE FROM 2018

 

Net income

$27.4 

 

    (2.5%)      

 

Revenue

$91.2 

 

   0.2%      

 

Average loans in business segments

$915 

 

   5.0%      

 

Average deposits

$1,380 

 

   5.0%      

 

Share repurchases and common stock dividends

$34.3 

 

 34.4%      

 

    

GROW WITH OUR CUSTOMER-FOCUSED STRATEGY

   

Business referrals

7.8 million 

 

 10.9%      

 

Primary consumer account holders

91% 

 

          —      

 

Merrill Lynch net new households

35 thousand 

 

    19%      

 

Global Banking—U.S. Fortune 1000 (% covered)

95% 

 

    1%      

 

Active mobile users

  29.2 million 

 

  10.4%      

 

Consumer Banking satisfaction

80.0% 

 

    1%      

 

Brand favorability

65% 

 

   10%      

 

    

GROW WITHIN OUR RISK FRAMEWORK

   

Net charge-off ratio

0.38% 

 

          (3 bps)      

 

Net charge-offs

$3.6 

 

    (3.1%)      

 

Risk-weighted assets(1)

$1,493 

 

    3.9%      

 

G-SIB surcharge capital buffer(2)

   2.5% 

 

62.5 bps      

 

Average market risk VaR for trading(3)

$  38 million 

 

    —      

 

    

GROW IN A SUSTAINABLE MANNER

   

Noninterest expense

$54.9 

 

    3.3%      

 

Efficiency ratio

60.17% 

 

       177 bps      

 

Tech initiative spending

$3.4 

 

    14%      

 

Shared success awards to employees (% covered)

~95% 

 

—      

 

Low carbon investing

$26.4 

 

15.3%      

 

Investments in Community Development Financial Institutions

$  1.5 

 

—      

 

Philanthropic investments

$250 million 

 

—      

 

Employee Engagement Score

   85% 

 

      3%      

 

Employee turnover

   11% 

 

       (1%)      

 

LOGO

 

*

See page 58 for a list of the companies in our primary competitor group

 
 
  (1)

Risk-weighted assets are presented for the approach that yields the lower Common equity tier 1 ratio, which was the Standardized approach at December 31, 2019 and 2018.

 
   (2)

“G-SIBs” are global systemically important banks designated by the Financial Stability Board as of November 22, 2019. The G-SIB surcharge capital buffer at December 31, 2018 reflects transition provisions for minimum capital requirements, which were fully phased in as of January 1, 2019.

 
  (3)

VaR model uses historical simulation approach based on three years of historical data and an expected shortfall methodology equivalent to a 99% confidence level.

 

 

ii      BANK OF AMERICA


Table of Contents

Proxy statement summary   

 

 

Governance objectives

Our Board of Directors oversees the development and execution of our strategy. The Board has adopted robust governance practices and procedures consistent with Responsible Growth. Our Board has implemented a number of measures to enrich Board composition, enhance independent oversight, and increase their effectiveness. These measures align our corporate governance structure with achieving our strategic objectives, and enable our Board to effectively communicate and oversee our culture of compliance and rigorous risk management.

 

LOGO

Key statistics about our director nominees

 

 

6.4

 

years average tenure, below the 8.0-year S&P 500 average(1)

 

 

 

    

 

 

16 of 17

 

are independent

 

 

    

 

 

35%

 

are women

 

 

    

 

 

47%

 

are ethnically and gender diverse

 

 

 

    

 

 

65%

 

have CEO-level experience

 

 

    

 

 

35%

 

have senior executive experience at financial institutions

 

 

 

(1)

Our director nominees’ average tenure is calculated by full years of completed service based on date of initial election as of our annual meeting date; source for S&P 500 average: 2019 Spencer Stuart Board Index.

 

2020 PROXY STATEMENT      iii


Table of Contents

   Proxy statement summary

 

 

Our shareholders inform and guide achievement of governance objectives

Our investor relations and management regularly meet with investors, prospective investors, and investment analysts to discuss our business and strategy. In addition to the investor relations meetings, our Board and management also routinely engage with our shareholders and other stakeholders. Throughout 2019 and into 2020, we provided direct updates about our Board and our company to our 250 largest shareholders representing approximately 62% of our shares outstanding and to key stakeholders. During that same time period, our Board and management met with shareholders representing approximately 31% or 2.8 billion of our shares outstanding and with other stakeholders to solicit their input on important governance, executive compensation, human capital management, regulatory, sustainability, and other matters. This continued exchange has informed our Board’s meeting agendas, and contributes to governance and disclosure enhancements that help us address the issues our shareholders and key stakeholders tell us matter most to them. Importantly, this engagement process complements Responsible Growth and assists us in achieving our strategic objectives, creating long-term value, maintaining our culture of compliance, and contributing to our environmental, social, and governance activities.

To provide more clarity to investors and stakeholders, including in response to investors’ input regarding Board committee-level oversight of human capital management, ESG, and sustainability matters, in early 2020 the Board changed the name of its Compensation and Benefits Committee to “Compensation and Human Capital Committee”, and changed the name of its Corporate Governance Committee to “Corporate Governance, ESG, and Sustainability Committee”. This follows changes to the Corporate Governance, ESG, and Sustainability Committee’s charter in 2016 to reflect more direct oversight of our company’s ESG matters and our management-level Global ESG Committee.

Our Board-driven shareholder engagement process

 

 

LOGO

See “Shareholder engagement” on page 29 for more information on our shareholder engagement philosophy and activities.

 

iv      BANK OF AMERICA


Table of Contents

Proxy statement summary   

 

 

Compensation highlights

Pay-for-performance compensation philosophy

Our compensation philosophy is to pay for performance over the long-term, as well as on an annual basis. Our performance considerations include both financial and non-financial measures—including the manner in which results are achieved. These considerations reinforce and promote Responsible Growth and maintain alignment with our Risk Framework.

Our executive compensation program provides a mix of salary, incentives, and benefits paid over time to align executive officer and shareholder interests. A majority of total variable compensation granted to named executive officers is deferred equity-based awards, further encouraging long-term focus on generating sustainable growth.

Continued dedication to Responsible Growth drove strong results in 2019

 

 

LOGO

In recognition of our Responsible Growth results, overall company performance, and the CEO’s individual performance, the Compensation and Human Capital Committee and the Board’s independent directors determined the following 2019 compensation for our CEO:

  Total compensation, inclusive of base salary and equity-based
incentives, of $26.5 million, unchanged from 2018

  LOGO  

  Based on shareholder input and our Board’s assessment, pay structure is unchanged from prior years

 

  94.3% of Mr. Moynihan’s total compensation is variable and directly linked to company performance. All CEO variable compensation was awarded in equity (as it has been since 2010)

  Half of Mr. Moynihan’s variable compensation is performance restricted stock units (PRSUs) that must be re-earned based on sustained three-year average performance of key metrics (return on assets and growth in adjusted tangible book value)

  The remainder of the CEO’s variable pay is cash-settled restricted stock units (CRSUs) and time-based restricted stock units (TRSUs) settled in stock

  Mr. Moynihan must hold 50% of net after-tax shares received from equity-based awards until one year after retirement

 

   

          Compensation risk management features

 

    

Historical “Say on Pay” votes

 

 

  Mix of fixed and variable pay

 

  Balanced, risk-adjusted performance measures

 

  Pay-for-performance process that bases individual awards on actual results and how those results were achieved

 

  Review of independent control function feedback in performance     

 

  Deferral of a majority of variable pay through equity-based awards

 

  Robust stock ownership requirements, and executive officers must hold 50% of net after-tax shares received from equity-based awards until retirement

 

  Use of multiple cancellation and clawback features for equity-based awards

 

    

Our Compensation and Human Capital Committee believes the results of last year’s “Say on Pay” vote and input from our shareholder engagement affirmed our shareholders’ support of our company’s executive compensation program. This informed our decision to maintain a consistent overall approach in setting executive compensation for 2019.

 

LOGO

See “Compensation discussion and analysis” on page 46.

(1) Represents a non-GAAP financial measure. See Appendix A for a reconciliation of accounting principles generally accepted in the United States of America (GAAP) and non-GAAP financial measures.

(2) Total compensation pay components do not equal 100% due to rounding. For additional information about compensation paid, accrued, or awarded in 2019, see “Executive compensation” on page 60.

 

2020 PROXY STATEMENT      v


Table of Contents

   Proxy statement summary

 

 

Responsible Growth

 

 

Responsible Growth means we must grow, no excuses. We have to do it by focusing on delivering for clients within our risk parameters. And it must be sustainable. To be sustainable, we want to be the best place to work for our team, we share our success with our communities, and we drive operational excellence.

 

—Brian T. Moynihan   

Chairman and CEO   

 

 

 

What would you like the power to do? At Bank of America, we ask this question every day of all those we serve. It is at the core of how we live our values, deliver our purpose, and achieve Responsible Growth.

 

We deliver on our purpose—to help make financial lives better through the power of every connection—through Responsible Growth. A tenet of Responsible Growth is that growth has to be sustainable.(1) Sustainable, Responsible Growth enables us to address some of the key challenges facing the world today while also creating business opportunities, allowing us to create shared success with our employees, clients, and communities around the world.

As a result of this work, we are helping to advance the global economy in sustainable ways—creating jobs, developing infrastructure, and addressing societal challenges, while managing risk, developing talent, and providing returns to our investors, clients, and for our business. To learn more, visit http://bankofamerica.com/responsiblegrowth.

Driving ESG leadership

Our Environmental, Social, and Governance (ESG) approach is integrated into each of our eight lines of business and helps define how we pursue growing business opportunities and manage risk. Our management-level Global ESG Committee is comprised of senior executives across every line of business and support function who help guide the company’s efforts and enable ESG progress. The committee identifies and discusses ESG issues material to our business—including our human capital management practices, products and service offerings, client selection, and investments in creating a sustainable global economy. It helps set and monitor our progress against these ESG goals, reports regularly to our Board through the Corporate Governance, ESG, and Sustainability Committee, and oversees disclosure to investors, stakeholders, and clients through annual ESG reporting in our Annual Report and on our company’s website.

In addition, the chair of our Global ESG Committee, Vice Chairman Anne Finucane, and her team engage with consumer advocates, community advisors, and other stakeholders for their advice and guidance in shaping our ESG policies and practices. In 2005, we founded our National Community Advisory Council, a forum for senior leaders from social justice, consumer advocacy, community development, environmental, research, and advocacy organizations, and senior executives to meet with the council at least twice annually for external perspectives on our business policies, practices, and products.

Being a great place to work

Another way we facilitate sustainable Responsible Growth is by being a great place to work. We do this by listening to our employees so that our programs and resources enhance their experience and further their careers with us. We deliver on our commitment to be a great place to work by being an inclusive workplace for our employees around the world, creating opportunities for employees to grow and develop, recognizing and rewarding performance, and supporting employees’ physical, emotional, and financial wellness. Through this lens, we provide compensation, benefits, and resources to employees that reflect our commitment to be a great place to work. This is not only the right thing to do, it is core to achieving Responsible Growth in a sustainable manner.

Our focus on being a great place to work is highlighted in our 2019 Human Capital Management Report (available at https://about.bankofamerica.com/annualmeeting) and has been recognized across the world, including:

 

FORTUNE. Named as one of the 100 Best Companies to Work For, and as #4 and the only financial services company on the inaugural list of Best Big Companies to Work For

 

Euromoney. Named World’s Best Bank for Diversity and Inclusion, 2019, 2018 and 2016

  

Bloomberg Gender Equality Index. Included as a leader in gender equality, 2016-2019

  

Equileap. Named leading company in U.S. for gender equality in the 2019 U.S. and Global Gender Equity Reports

See “Responsible Growth” on page 32.

 

(1)

Responsible Growth that is sustainable means (i) we share our success, including through our focus on ESG leadership; (ii) we invest in our talent and capabilities by focusing on continuous improvement through operational excellence; and (iii) we focus on the resources and benefits needed to be a great place to work for our employees.

 

vi      BANK OF AMERICA


Table of Contents

Table of contents   

 

 

TABLE OF CONTENTS

 

Proposal 1: Electing directors      2  

Identifying and evaluating director candidates

     3  

Our director nominees

     5  

Communicating with our Board

     16  

Corporate governance

     17  

Our Board of Directors

     17  

Director independence

     17  

Independent board leadership

     18  

Board evaluation

     20  

Director education

     21  

CEO and senior management succession
planning

     22  

Board meetings, committee membership, and  attendance

     22  

Board oversight of risk

     24  

Compensation governance and risk
management

     26  

Additional corporate governance information

     28  
Shareholder engagement      29  
Responsible Growth      32  

Making a global impact

     33  

Being a great place to work

     35  

Recognition for our Responsible Growth

     39  
Related person and certain other transactions      40  
Stock ownership of directors, executive officers,
and certain beneficial owners
     41  

Director compensation

     43  
    Proposal 2: Approving our executive compensation
(an advisory, non-binding “Say on Pay” resolution)
     46  
   

 

Compensation discussion and analysis

    
46
 
   

Executive summary

     47  
   

2019 Company & segment performance

     48  
   

Executive compensation program features

     50  
   

Compensation decisions and rationale

     53  
   

Other compensation topics

     58  
   

Compensation and Human Capital Committee report

     59  
   

Executive compensation

     60  
   

Summary compensation table

     60  
   

Grants of plan-based awards table

     62  
   

Year-end equity values and equity exercised
or vested table

     65  
   

Pension benefits table

     66  
   

Nonqualified deferred compensation table

     67  
   

Potential payments upon termination or
change in control

     68  
   

CEO Pay Ratio

     71  
    Proposal 3: Ratifying the appointment of our independent registered public accounting firm for 2020      72  
   

Audit committee pre-approval policies and
procedures

     73  
   

Audit committee report

     73  
    Proposals 4-7: Shareholder proposals      74  
   

Voting and other information

     85  
    Appendix A: Reconciliation of GAAP and non-GAAP financial measures      A-1  
 

Internet availability of proxy materials

We mailed or emailed to most of our shareholders a Notice of Internet Availability of our proxy materials with instructions on how to access our proxy materials online and how to vote. If you are a registered holder and would like to change the method of delivery of your proxy materials, please contact our transfer agent, Computershare, P.O. Box 505005, Louisville, KY 40233; Toll free: 800-642-9855; or at www.computershare.com/bac. You may do the same as a beneficial owner by contacting the bank, broker, or other nominee where your shares are held.

Proxy statement availability

We are providing or making available this proxy statement to solicit your proxy to vote on the matters presented at our annual meeting. We commenced providing and making available this proxy statement on March 9, 2020. Our Board requests that you submit your proxy by the Internet, telephone, or mail so that your shares will be represented and voted at our annual meeting.

 

2020 PROXY STATEMENT      1


Table of Contents

   Proposal 1: Electing directors

 

 

PROPOSAL 1: ELECTING DIRECTORS

Our Board is presenting 17 nominees for election as directors at our annual meeting. All nominees currently serve as directors on our Board. Other than Ms. Denise L. Ramos, who was appointed to our Board in July 2019, all nominees were elected by you at our 2019 annual meeting of shareholders. Each director elected at the meeting will serve until our 2021 annual meeting or until a successor is duly elected and qualified. Each director nominee has consented to being named in this proxy statement and to serving as a director if elected. If any nominee is unable to stand for election for any reason, the shares represented at our annual meeting may be voted for another candidate proposed by our Board, or our Board may choose to reduce its size.

 

           

Nominee

  Age(1)   Principal occupation

  Director  

since

  Independent  

Other

  U.S.-listed  

company

boards

Committee membership

(C = Chair)

           

Sharon L. Allen

68 Former Chairman, Deloitte LLP 2012 Yes 1

Audit (C)

Corporate Governance, ESG, and Sustainability

           

Susan S. Bies

72 Former Member, Board of Governors of the Federal Reserve System 2009 Yes None

Corporate Governance, ESG, and Sustainability

Enterprise Risk

           

Jack O. Bovender, Jr.

74

Lead Independent Director,

Bank of America Corporation;

Former Chairman and CEO, HCA Inc.

2012 Yes None None
           

Frank P. Bramble, Sr.

71 Former Executive Vice Chairman, MBNA Corporation 2006 Yes None

Corporate Governance, ESG, and Sustainability

Enterprise Risk (C)

           

Pierre J.P. de Weck

69 Former Chairman and Global Head of Private Wealth Management, Deutsche Bank AG 2013 Yes None

Compensation and Human Capital

Enterprise Risk

           

Arnold W. Donald

65

President and CEO,

Carnival Corporation and Carnival plc

2013 Yes 1

Audit

Compensation and Human Capital

           

Linda P. Hudson

69

Former Chairman and CEO, The Cardea Group, LLC;

Former President and CEO, BAE Systems, Inc.

2012 Yes 1

Compensation and Human Capital

Enterprise Risk

           

Monica C. Lozano

63

CEO, College Futures Foundation;

Former Chairman, US Hispanic Media Inc.

2006 Yes 1

Compensation and Human Capital (C)

Enterprise Risk

           

Thomas J. May

73

Former Chairman and CEO,

Eversource Energy

2004 Yes 1

Corporate Governance, ESG, and Sustainability (C)

Enterprise Risk

           

Brian T. Moynihan

60

Chairman and CEO,

Bank of America Corporation

2010 No None None
           

Lionel L. Nowell III

65 Former SVP and Treasurer, PepsiCo, Inc. 2013 Yes 2

Audit

Corporate Governance, ESG, and Sustainability

           

Denise L. Ramos

63 Former CEO, ITT Inc. 2019 Yes 2

Audit

Compensation and Human Capital

           

Clayton S. Rose

61 President, Bowdoin College 2018(2) Yes None

Audit

Compensation and Human Capital

           

Michael D. White

68 Former Chairman, President and CEO, DIRECTV 2016 Yes 2

Audit

Compensation and Human Capital

           

Thomas D. Woods

67 Former Vice Chairman and SEVP, Canadian Imperial Bank of Commerce 2016 Yes None

Corporate Governance, ESG, and Sustainability

Enterprise Risk

           

R. David Yost

72 Former CEO, AmerisourceBergen Corporation 2012 Yes 2

Audit

Compensation and Human Capital

           

Maria T. Zuber

61

Vice President for Research and

E.A. Griswold Professor of Geophysics, Massachusetts Institute of Technology

2017 Yes 1

Corporate Governance, ESG, and Sustainability

Enterprise Risk

 

(1)

Age as of annual meeting date.

 

(2)

Dr. Rose previously served as a member of our Board from 2013 to 2015.

Number of Board and committee meetings held in 2019*

 

21

 

Board

 

14

 

Audit

 

7

 

    Compensation and     Human Capital

 

7

 

    Corporate Governance,         ESG, and Sustainability    

 

12

 

Enterprise Risk

 

*

In addition to the number of formal meetings reflected from time to time the Board and/or its committees also held educational and/or informational sessions. The number of formal Board meetings reflected includes the Board’s stand-alone risk oversight meetings.

 

2      BANK OF AMERICA


Table of Contents

Proposal 1: Electing directors   

 

 

Identifying and evaluating director candidates

 

 

 

Board composition

 

Our Board oversees the business and affairs of the company. Our Board provides active and independent oversight of management. To carry out its responsibilities and set the appropriate tone at the top, our Board is keenly focused on the character, integrity, and qualifications of its members, and its leadership structure and composition.

 

Our Board believes our directors best serve our company and shareholders by possessing high personal integrity and character, demonstrated management and leadership ability, extensive experience within our industry and across sectors, and the ability
to exercise their sound and independent judgment in a collegial manner.

   

 

Core director attributes

 

         
    LOGO    

High Personal Integrity

 

      
    LOGO    

Strong Business Judgment

 

 
    LOGO    

Demonstrated Achievement in Public or Private Sectors

 

 
    LOGO    

Proven Leadership and Management Ability

 

 
    LOGO    

Dedicated—Able to Devote Necessary Time to Oversight Duties and Represent Shareholders’ Interest

 

 
    LOGO    

Free of Potential Conflicts of Interests

 

 
    LOGO    

Collegial Manner

 

 

Our Board seeks directors whose complementary knowledge, experience, and skills provide a broad range of perspectives and leadership expertise in financial services and other global, highly complex and regulated industries, strategic planning and business development, business operations, marketing and distribution, technology/cybersecurity, risk management and financial controls, human capital management, corporate governance, public policy, and other areas important to our company’s strategy and oversight. Our Board also assesses directors’ age and tenure, and Board continuity; it strives to achieve a balance between the perspectives of new directors and those of longer-serving directors with industry and institutional insights.

Our Board views diversity as a priority and seeks representation across a range of attributes, including gender, race, ethnicity, and professional experience, and regularly assesses our Board’s diversity when identifying and evaluating director candidates. In addition, our Corporate Governance, ESG, and Sustainability Committee follows applicable regulations in confirming that our Board includes members who are independent, possess financial literacy and expertise, and an understanding of risk management principles, policies, and practices, and have experience in identifying, assessing, and managing risk exposures.

Our current Board, composed of the 17 director nominees, reflects the Board’s commitment to identify, evaluate, and nominate candidates who possess personal qualities, qualifications, skills, and diversity of backgrounds, and provide a mix of tenures that, when taken together, best serve our company and our shareholders. See “Our director nominees” on page 5.

Succession planning and the director recruitment process

Our Board regularly reviews and renews its composition. Our Corporate Governance, ESG, and Sustainability Committee is responsible for identifying and recommending director candidates to our Board for nomination using a director selection process that has been reviewed and acknowledged by our primary bank regulators. The Board, in coordination with the Board committees, also regularly considers Board leadership succession planning and committee membership.

 

 

LOGO

 

2020 PROXY STATEMENT      3


Table of Contents

   Proposal 1: Electing directors

 

 

LOGO Assess. The Committee regularly reviews the mix of individual directors on our Board to assess the overall Board composition. Among other factors, the Committee considers our company’s strategy and needs; our directors’ experiences, gender, race, ethnicity, tenure, and age; and the attributes and qualifications our Board identifies in its self-evaluations to develop criteria for potential candidates and assess whether these attributes and qualifications are additive to our overall Board composition.

 

To maintain a vibrant mixture of viewpoints and benefit from the fresh perspectives brought by new directors and the institutional knowledge and industry insights of directors having longer experience on our Board, the Committee reviews measures that enhance the Board’s succession planning process, including the appropriate retirement age and related tenure limitations, and ability to commit the time necessary to our company. For additional information on the average tenure of directors serving on our Board and each director’s tenure, see “Our director nominees” on page 5.

 

LOGO Identify. To drive effective Board renewal and director and Board leadership succession planning, the Committee has a regularly recurring agenda item to develop and review a diverse group of potential director candidates. Based on the factors and criteria developed in the assessment phase, the Committee engages third-party search firms to identify potential candidates for review. It considers and provides feedback on the then-current pool of director talent identified by search firms; the search firms periodically update the list of potential director candidates based on Committee and Board input.

 

In 2019, the Committee continued to develop the pool of potential director candidates using multiple external search firms. In its work with the external search firms, the Committee emphasizes the importance of diversity in its consideration of director candidates. Potential director candidates possess professional experiences and the gender, racial, and ethnic diversity aligned with Committee-specified criteria and with the qualities identified by our Board in recent self-evaluations. See “Board evaluation” on page 20 for additional information on our Board’s self-evaluation process. The Committee also considers candidates proposed by management and our shareholders.

 

In 2019, Ms. Ramos was identified by an external search firm for inclusion in the pool of potential director candidates, and appointed to the Board following Committee evaluation and nomination.

 

 

 

 

LOGO Evaluate. The Committee has an established process for evaluating director candidates that it follows regardless of who recommends the candidate for consideration. During this process, the Committee reviews available information regarding each candidate, including qualifications, experience, skills, and integrity, as well as race, gender, and ethnicity. The Committee also reviews the candidate’s independence, absence of conflicts, and any reputational risks.

 

Our Board understands the significant time commitment involved in serving on the Board and its committees. The Committee assesses directors’ time commitment to the Board throughout the year, including through the annual formal self-evaluation process. The Committee evaluates whether candidates and serving directors are able to devote the time necessary to discharge their duties as directors, taking into account primary occupations, memberships on other boards, and other responsibilities. Prior to the annual renomination of currently serving directors, the Committee also assesses these factors. Once elected, directors are expected to seek Committee approval prior to joining the board of another public company. Directors who change principal occupations must offer to resign from the Board, subject to further evaluation by the Committee and the Lead Independent Director.

 

LOGO  Recommend. The Board selected our 17 director nominees based on their satisfaction of the core attributes described on page 20, and the belief that each can make substantial contributions to our Board and company. Our Board believes our nominees’ breadth of experience and their mix of attributes strengthen our Board’s independent leadership and effective oversight of management, in the context of our company’s businesses, our industry’s operating environment, and our company’s long-term strategy.

 

 

Director time commitment

 

Our Corporate Governance, ESG, and Sustainability Committee and Board nominate only candidates who they believe are capable of devoting the necessary time to discharge their duties, taking into account principal occupations, memberships on other boards, attendance at Board and committee meetings, and other responsibilities.

 

Our Corporate Governance Guidelines limit the maximum number of public company boards on which a director on our Board may serve at four public companies (including our Board), and specify that any public company chief executive officer who serves as a director on our Board may not serve on the boards of more than three public companies (including our Board). All of our directors and director nominees comply with this policy.

 

Through our Corporate Governance, ESG, and Sustainability Committee, the Board regularly reviews and closely monitors shareholders’ views on the appropriate number of public company boards on which directors may serve.

 

 

4      BANK OF AMERICA


Table of Contents

Proposal 1: Electing directors   

 

 

Our director nominees

Our director nominees represent a diverse range of qualifications and skills:

 

  They are seasoned leaders who have held an array of diverse leadership positions in complex, highly regulated businesses (including banks and other financial services organizations), and with one of our primary regulators

 

  They have served as chief executives and in senior positions in the areas of risk, operations, finance, technology, and human resources

 

  They bring deep and diverse experience in public and private companies, financial services, academia, the public sector, nonprofit organizations, and other domestic and international businesses
  They are experienced in regulated, non-financial services industries and organizations, adding to our Board’s understanding of overseeing a business subject to governmental oversight, and enhancing the diversity of our Board with valuable insights and fresh perspectives that complement those of our directors with specific experience in banking or financial services

 

  They represent diverse backgrounds and viewpoints

 

  They strengthen our Board’s oversight capabilities by having varied lengths of tenure that provide historical and new perspectives about our company
 

 

 

    

 

 

Director nominee highlights

 

PEOPLE OF COLOR AND/OR

GENDER DIVERSE:

 

         LOGO                 

 

 

REPRESENT A RANGE OF TENURES:

 

LOGO

 

 

PROVIDE INDEPENDENT OVERSIGHT:

 

         LOGO

 

16 OF OUR 17 DIRECTORS ARE INDEPENDENT

 

 

 

LOGO

 

 

Audit/Financial Reporting, enabling our directors to oversee our company’s audit function and preparation of financial statements

 

 

 

LOGO

 

 

Consumer, Corporate, Investment Business; Business Development, and Marketing, giving our directors experience across our business and its development

 

 

 

LOGO

 


 

Cybersecurity, Technology, and Information Security, enabling our directors to oversee management’s efforts to maintain our customers’ trust and protect their security information

 

 

 

LOGO

 

 

Environmental, Social, and Governance (ESG), which gives our directors insight into how these principles define how we deliver Responsible Growth

 

 

 

LOGO

 

 

Experience in Complex, Highly Regulated Businesses; Government, Public Policy, and Regulatory Affairs, enabling our directors to have a better understanding of the many factors involved in operating our business and insight into the key role of regulatory issues and government affairs in our business

 

 

 

LOGO

 

 

Financial Services Experience, providing our directors with deep insight into key issues affecting our company and industry

 

 

 

LOGO

 

 

Global Perspective, giving our directors insight into the many factors involved in overseeing management of our company’s global footprint

 

 

 

LOGO

 

 

Human Capital Management and Succession Planning, providing our directors with insight into our focus on robust talent development and our commitment to being a great place to work

 

 

 

LOGO

 

 

Public Company Board Service and Corporate Governance, enabling directors to use their knowledge of public company governance issues and policies to enhance our Board practices

 

 

 

LOGO

 

 

Risk Management, giving our directors the ability to oversee management in its comprehensive and rigorous approach to risk management

 

  LOGO

Strategic Planning, which enables our directors to oversee management’s development and implementation of strategic priorities

    

 

2020 PROXY STATEMENT      5


Table of Contents

   Proposal 1: Electing directors   

 

 

LOGO   

Our Board recommends a vote “for” each of the 17 nominees listed below for election as a director (Proposal 1).

Set forth below are each nominee’s name, age as of our annual meeting date, principal occupation, business experience, and U.S.-listed public company directorships held during the past five years. We also discuss the qualifications, attributes, and skills that led our Board to nominate each for election as a Bank of America director.

 

 

      

Sharon L. Allen

 

    

Age: 68

 

 

Director since: August 2012

 

      
 

LOGO

 

  

Former Chairman, Deloitte

 

Other U.S.-Listed Company Boards:

First Solar, Inc.

 

    

Ms. Allen’s responsibility for audit and consulting services in various positions with Deloitte LLP (Deloitte) enables her to bring extensive audit, financial reporting, and corporate governance experience to our Board. Her leadership positions with Deloitte give her broad management experience with large, complex businesses and an international perspective on risk management and strategic planning.

 

 

 

      

Professional highlights:

 

   Served as Chairman of Deloitte, a firm that provides audit, consulting, financial advisory, risk management, and tax services, as the U.S. member firm of Deloitte Touche Tohmatsu Limited from 2003 to 2011

 

   Employed at Deloitte for nearly 40 years in various leadership roles, including Partner and Regional Managing Partner, responsible for audit and consulting services for a number of Fortune 500 and large private companies

 

   Member of the Global Board of Directors, Chair of the Global Risk Committee, and U.S. Representative on the Global Governance Committee of Deloitte Touche Tohmatsu Limited from 2003 to 2011

 

   Member of the Board of Directors of a food and drug retailer seeking to become a public company under the name Albertsons Companies, Inc.

 

   Member of the Board of Directors of First Solar, Inc. and its Technology Committee, and Chair of its Audit Committee

 

Other leadership experience and service:

 

   Former Director and Chair of the National Board of Directors of the YMCA of the USA, a leading nonprofit organization for youth development, healthy living, and social responsibility

 

   Former Vice Chair of the Board of Trustees of the Autry National Center, the governing body of the Autry Museum of the American West

 

   Appointed by President George W. Bush to the President’s Export Council, which advised the President on export enhancement

 

      

 

6      BANK OF AMERICA


Table of Contents

   Proposal 1: Electing directors   

 

 

      

Susan S. Bies

 

    

Age: 72

 

 

Director since: June 2009

 

      
 

LOGO

 

   Former Member, Federal Reserve Board of Governors     

Ms. Bies’s role as a member of the Board of Governors of the Federal Reserve System (Federal Reserve Board) and her tenure with First Tennessee National Corporation (First Tennessee) enables her to bring deep experience in risk management, consumer banking, and insights regarding financial regulation to our Board. In particular, Ms. Bies focused on enterprise financial and risk management during her career with First Tennessee and further developed her regulatory expertise by serving on the Financial Accounting Standards Board (FASB) Emerging Issues Task Force. Her experience working at a primary regulator of our industry, along with her other regulatory and public policy experience, gives her unique and valuable perspective relevant to our company’s business, financial performance, and risk oversight. She brings an international perspective through her prior service on the Boards of Directors of Merrill Lynch International (MLI) and of Zurich Insurance Group Ltd. (Zurich Insurance).

 

 

 

      

Professional highlights:

 

   Senior Advisory Board Member to Oliver Wyman Group, a management consulting subsidiary of Marsh & McLennan Companies, Inc., February 2009 to March 2018

 

   Member of the Federal Reserve Board from 2001 to 2007, including a role as Chair of the Committee on Supervisory and Regulatory Affairs

 

   Represented the Federal Reserve Board on the Financial Stability Board and led the Federal Reserve Board’s efforts to modernize the Basel capital accord

 

   Served as a member of the FASB’s Emerging Issues Task Force from 1996 to 2001

 

   Served as Executive Vice President of Risk Management, Auditor, Chief Financial Officer, and Chair of the Asset Liability Management and the Executive Risk Management Committees at First Tennessee, a regional bank holding company, between 1979 and 2001

 

   Employed at the Federal Reserve Bank of St. Louis as a regional and banking structure economist at the start of her career

 

   Served as a director of and former Chair, Risk Committee for Zurich Insurance and as a director of Zurich American Insurance Company, Zurich Insurance’s North American subsidiary

 

   Served as Chair of the Board of Directors of MLI from August 2014 to December 2019

 

Other leadership experience and service:

 

   Served in leadership roles in various organizations, including the Committee on Corporate Reporting of the Financial Executives Institute; the End Users of Derivatives Association; the American Bankers Association; and the Bank Administration Institute

 

   Served in numerous roles with many professional, academic, civic, and charitable organizations, such as the American Economic Association; Institute of Management Accountants; International Women’s Forum; University of Memphis; Memphis Area Chamber of Commerce; Memphis Youth Initiative; and Memphis Partners

 

      

 

2020 PROXY STATEMENT      7


Table of Contents

   Proposal 1: Electing directors   

 

 

      

Jack O. Bovender, Jr.

 

    

Age: 74

 

 

Director since: August 2012

 

      
 

LOGO

 

  

Lead Independent Director, Bank of America Corporation

 

Former Chairman and Chief Executive Officer, HCA

 

    

Mr. Bovender’s roles as former Chairman, Chief Executive Officer, President, and Chief Operating Officer of HCA Inc. (HCA) enable him to bring his extensive experience leading a large, regulated, complex business to our Board. Mr. Bovender’s experience with HCA and service on the Board of Trustees of Duke University, including as Chair and as former Chair of its Presidential Search Committee and its Audit Committee, provide him with insight into board leadership, risk management, operational risk, and strategic planning, and valuable perspective on corporate governance issues.

 

 

 

      

Professional highlights:

 

   Chairman and Chief Executive Officer of HCA, the largest investor-owned hospital operator in the U.S. and a Fortune 100 company owning and operating hospitals and surgery centers, from January 2002 to December 2009, and Chief Executive Officer from January 2001 to January 2009

 

   During a 32-year tenure at HCA, held several senior-level positions including President and Chief Operating Officer

 

   40-year veteran of the healthcare industry starting with hospital administration for the U.S. Navy

 

Other leadership experience and service:

 

   Chair of the Duke University Board of Trustees and chair of the Executive Committee; serves on the Duke University Health System Board; and an Emeritus member of the Board of Visitors at the Duke University Fuqua School of Business

 

   Recipient of Duke University’s Distinguished Alumni Award in 2012

 

   Served on the Board of Governors of the American College of Healthcare Executives (ACHE); recipient of ACHE’s Gold Medal Award recognizing significant career-long contributions to the healthcare profession

 

      

 

      

Frank P. Bramble, Sr.

 

    

Age: 71

 

 

Director since: January 2006

 

      
 

LOGO

 

   Former Executive Vice Chairman, MBNA Corporation     

Mr. Bramble brings broad-ranging financial services experience, international experience, and historical insight to our Board, having held leadership positions at two financial services companies acquired by our company (MBNA Corporation, acquired in 2006, and MNC Financial Inc., acquired in 1993). As a former executive officer of one of the largest credit card issuers in the U.S. and a major regional bank, Mr. Bramble has dealt with a wide range of issues important to our company, including risk management, credit cycles, sales and marketing to consumers, and audit and financial reporting.

 

 

 

      

Professional highlights:

 

   Served as Chairman of the Board of Trustees from July 2014 to June 2016 and Interim President from July 2013 to June 2014 of Calvert Hall College High School in Baltimore, Maryland

 

   Served as Executive Vice Chairman from July 2002 to April 2005 and Advisor to the Executive Committee from April 2005 to December 2005 of MBNA Corporation, a financial services company acquired by Bank of America in January 2006

 

   Previously served as the Chairman, President, and Chief Executive Officer at Allfirst Financial, Inc., MNC Financial Inc., Maryland National Bank, American Security Bank, and Virginia Federal Savings Bank

 

   Served as a member of the Board of Directors, from April 1994 to May 2002, and Chairman, from December 1999 to May 2002, of Allfirst Financial, Inc. and Allfirst Bank, U.S. subsidiaries of Allied Irish Banks, p.l.c.

 

   Began his career as an audit clerk at the First National Bank of Maryland

 

Other leadership experience and service:

 

   Emeritus member of the Board of Visitors of Towson University and guest lecturer in business strategy and accounting from 2006 to 2008

 

      

 

8      BANK OF AMERICA


Table of Contents

   Proposal 1: Electing directors   

 

 

      

Pierre J.P. de Weck

 

    

Age: 69

 

 

Director since: July 2013

 

      
 

LOGO

 

   Former Chairman and Global Head of Private Wealth Management, Deutsche Bank     

Mr. de Weck’s experience as an executive with UBS AG (UBS) and Deutsche Bank AG (Deutsche Bank) enables him to bring extensive knowledge of the global financial services industry to our Board. As a former Chairman and Global Head of Private Wealth Management and member of the Group Executive Committee of Deutsche Bank, Mr. de Weck has broad experience in risk management and strategic planning and brings a valuable international perspective to our company’s business activities, including through his service on the Board of Directors of MLI and BofA Securities Europe S.A. (BofASE), our French broker-dealer subsidiary. Mr. de Weck’s service as Chief Credit Officer of UBS provides him with further credit risk management experience.

 

 

 

      

Professional highlights:

 

   Served as the Chairman and Global Head of Private Wealth Management and as a member of the Group Executive Committee of Deutsche Bank from 2002 to May 2012

 

   Served on the Management Board of UBS from 1994 to 2001; as Head of Institutional Banking from 1994 to 1997; as Chief Credit Officer and Head of Private Equity from 1998 to 1999; and as Head of Private Equity from 2000 to 2001

 

   Held various senior management positions at Union Bank of Switzerland, a predecessor firm of UBS, from 1985 to 1994

 

   Currently serves as Chair of the Board of Directors of MLI (and previously chair of the MLI Board’s Risk Committee), and as Chair of the Board of Directors of BofASE.

 

      

 

      

Arnold W. Donald

 

    

Age: 65

 

 

Director since: January 2013

 

      
 

LOGO

 

  

President and Chief Executive Officer, Carnival

 

Other U.S.-Listed Company Boards: Carnival

Past Five Years: Crown Holdings, Inc.

 

    

Mr. Donald’s roles as President and Chief Executive Officer of Carnival Corporation and Carnival plc (Carnival), as a former senior executive at Monsanto Company (Monsanto), and as the former Chairman and Chief Executive Officer of Merisant Company (Merisant), enable him to bring his extensive experience in strategic planning and operations in regulated, consumer, retail, and distribution businesses to our Board. His board service with public companies gives him experience with risk management, global operations, and regulated businesses. His experience heading The Executive Leadership Council and the Juvenile Diabetes Research Foundation International gives him a distinct perspective on governance matters, social responsibility, and diversity.

 

 

 

      

Professional highlights:

 

   President and Chief Executive Officer of Carnival, a cruise and vacation company, since July 2013

 

   Served as President and Chief Executive Officer from November 2010 to June 2012 of The Executive Leadership Council, a nonprofit organization providing a professional network and business forum to African-American executives at major U.S. companies

 

   President and Chief Executive Officer of the Juvenile Diabetes Research Foundation International from January 2006 to February 2008

 

   Served as Chairman and Chief Executive Officer of Merisant from 2000 to 2003, a privately-held global manufacturer of tabletop sweeteners, and remained as Chairman until 2005

 

   Joined Monsanto in 1977 and held several senior leadership positions with global responsibilities, including President of its Agricultural Group and President of its Nutrition and Consumer Sector, over a more than 20-year tenure

 

   Served as a member of the Board of Directors of Crown Holdings, Inc. and member of its Compensation Committee

 

Other leadership experience and service:

 

   Appointed by President Clinton and re-appointed by President George W. Bush to the President’s Export Council

 

      

 

2020 PROXY STATEMENT      9


Table of Contents

   Proposal 1: Electing directors   

 

 

      

Linda P. Hudson

 

    

Age: 69

 

 

Director since: August 2012

 

      
 

LOGO

 

  

Former Executive Officer, The Cardea Group,
LLC

 

Former President and Chief Executive Officer, BAE

 

Other U.S.-Listed Company Boards:

Trane Technologies plc (formerly, Ingersoll-Rand plc)

Past Five Years: The Southern Company

 

    

Ms. Hudson’s role as a former President and Chief Executive Officer of BAE Systems, Inc. (BAE) enables her to bring her broad experience in strategic planning and risk management to our Board. Further, with her service as an executive director of BAE Systems plc (BAE Systems), Ms. Hudson’s background provides her with international perspective, geopolitical insights, and experience as a leader of a large, international, highly regulated, complex business. Ms. Hudson’s career in the defense and aerospace industry gives her knowledge of technology risks such as cybersecurity risk.

 

 

 

      

Professional highlights:

 

   Chairman and Chief Executive Officer of The Cardea Group, LLC, a management consulting business, May 2014 to January 2020

 

   Served as CEO Emeritus of BAE, a U.S.-based subsidiary of BAE Systems, a global defense, aerospace, and security company headquartered in London, from February 2014 to May 2014, and as President and Chief Executive Officer of BAE from October 2009 until January 2014

 

   Served as President of BAE Systems’ Land and Armaments operating group, the world’s largest military vehicle and equipment business, from October 2006 to October 2009

 

   Prior to joining BAE, served as Vice President of General Dynamics Corporation and President of its Armament and Technical Products business; held various positions in engineering, production operations, program management, and business development for defense and aerospace companies

 

   Served as a member of the Executive Committee and as an executive director of BAE Systems from 2009 until January 2014 and as a member of the Board of Directors of BAE from 2009 to April 2015.

 

   Served as a member of the Board of Directors of The Southern Company and its Nominating, Governance and Corporate Responsibility and Operations, Environmental and Safety Committees from 2014 to July 2018

 

   Member of the Board of Directors of Trane Technologies plc (formerly, Ingersoll-Rand plc) and its Compensation, Corporate Governance and Nominating, and Technology and Innovation Committees

 

Other leadership experience and service:

 

   Member of the Board of Directors of the University of Florida Foundation, Inc. and the University of Florida Engineering Leadership Institute, and a former member of the Charlotte Center Executive Board for the Wake Forest University School of Business and of the Board of Trustees of Discovery Place, a nonprofit education organization dedicated to inspiring exploration of the natural and social world

 

   Elected member to the National Academy of Engineering, one of the highest professional honors accorded an engineer

 

      

 

10      BANK OF AMERICA


Table of Contents

   Proposal 1: Electing directors   

 

 

      

Monica C. Lozano

 

    

Age: 63

 

 

Director since: April 2006

 

      
 

LOGO

 

  

Chief Executive Officer, College Futures Foundation

 

Former Chairman, US Hispanic Media Inc.

 

Other U.S.-Listed Company Boards:

Target Corporation

Past Five Years: The Walt Disney Company

 

    

Ms. Lozano’s roles as the Chief Executive Officer of College Futures Foundation, a charitable foundation working to increase the rate of college graduation for low-income California students, and as the former Chairman and Chief Executive Officer of ImpreMedia LLC (ImpreMedia), a leading Hispanic news and information company, enable her to bring her experience in broad leadership management over areas such as operations, marketing, and strategic planning to our Board. Ms. Lozano has a deep understanding of issues that are important to the Hispanic community, a growing U.S. demographic. Her public company board service for Target Corporation, her past public company board service for The Walt Disney Corporation, and her past roles with the University of California and the University of Southern California give her board-level experience overseeing large organizations with diversified operations on matters such as governance, executive compensation, risk management, and financial reporting. Ms. Lozano’s experience as a member of President Obama’s Council on Jobs and Competitiveness also provided her with valuable perspective on important public policy, societal, and economic issues relevant to our company.

 

 

 

      

Professional highlights:

 

   Chief Executive Officer of College Futures Foundations since December 2017. College Futures Foundation is a charitable foundation focused on increasing the rate of bachelor’s degree completion among California student populations who are low-income and have had a historically low college success rate

 

   Served as Chair of the Board of Directors of U.S. Hispanic Media Inc., the parent company of ImpreMedia, a leading Hispanic news and information company, from June 2014 to January 2016

 

   Served as Chairman of ImpreMedia from July 2012 to January 2016, Chief Executive Officer from May 2010 to May 2014, and Senior Vice President from January 2004 to May 2010

 

   Served as Publisher of La Opinión, a subsidiary of ImpreMedia and the leading Spanish-language daily print and online newspaper in the U.S., from 2004 to May 2014, and Chief Executive Officer from 2004 to July 2012

 

   Member of the Board of Directors of Target Corporation and its Audit and Finance Committee, and Nominating and Governance Committee

 

Other leadership experience and service:

 

   Served as a member of President Obama’s Council on Jobs and Competitiveness from 2011 to 2012 and served on President Obama’s Economic Recovery Advisory Board from 2009 to 2011

 

   Currently serves as Chair of the Board of Directors of the Weingart Foundation; served as the Chair of the Board of Regents of the University of California, as a member of the Board of Trustees of The Rockefeller Foundation, as a member of the Board of Trustees of the University of Southern California, and as a member of the State of California Commission on the 21st Century Economy

 

      

 

2020 PROXY STATEMENT      11


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   Proposal 1: Electing directors   

 

 

      

Thomas J. May

 

    

Age: 73

 

 

Director since: April 2004

 

      
 

LOGO

 

  

Former Chairman, President, and Chief Executive Officer, Eversource Energy

 

Other U.S.-Listed Company Boards:

Past Five Years: Viacom Inc.;

Eversource Energy

 

    

Mr. May’s roles as former Chairman, President, and Chief Executive Officer of Eversource Energy enable him to bring his extensive experience with regulated businesses, operations, risk management, business development, strategic planning, board leadership, and corporate governance matters to our Board and gives him insight into the issues facing our company’s businesses. Having experience as a Certified Public Accountant, Mr. May brings extensive accounting and financial skills, and a professional perspective on financial reporting and enterprise and operational risk management.

 

 

 

      

Professional highlights:

 

   Served as Chairman of the Board of Trustees of Eversource Energy, one of the nation’s largest utilities, from October 2013 to May 2017

 

   Served as President and Chief Executive Officer of Eversource Energy from April 2012 until retirement in May 2016

 

   Served as Chairman and Chief Executive Officer of NSTAR, which merged with Northeast Utilities (now Eversource Energy), from 1999 to April 2012, and was President from 2002 to April 2012; also served as Chief Financial Officer and Chief Operating Officer at NSTAR

 

   Served as the non-executive Chairman of the Board of Directors of Viacom Inc.

 

   Member of the Board of Directors of Liberty Mutual Holding Company, Inc.

 

      

 

      

Brian T. Moynihan

 

    

Age: 60

 

 

Director since: January 2010

 

      
 

LOGO

 

   Chairman of the Board and Chief Executive Officer, Bank of America Corporation     

As our Chief Executive Officer, Mr. Moynihan conceived of and leads our approach to Responsible Growth, based on driving a straightforward business model serving three customer and client groups with core financial services, which has delivered record earnings and significant capital return to shareholders. Mr. Moynihan has demonstrated leadership qualities, management capability, knowledge of our business and industry, and a long-term strategic perspective. In addition, he has many years of international and domestic financial services experience, including wholesale and retail businesses.

 

 

 

      

Professional highlights:

 

   Appointed Chairman of the Board of Directors of Bank of America Corporation in October 2014 and President and Chief Executive Officer in January 2010. Prior to becoming Chief Executive Officer, Mr. Moynihan ran each of the company’s operating units

 

   Chairman of the Board of Directors of Bank Policy Institute; prior Chairman of Financial Services Forum; member (and prior Chairman) of the Supervisory Board of The Clearing House Association L.L.C.; member of Business Roundtable; Chairman of the World Economic Forum’s International Business Council; President of the Federal Advisory Council of the Federal Reserve Board

 

   Member of Board of Fellows of Brown University; member of Advisory Council of Smithsonian’s National Museum of African American History and Culture; Chairman of Charlotte Executive Leadership Council

 

      

 

12      BANK OF AMERICA


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   Proposal 1: Electing directors   

 

 

      

Lionel L. Nowell III

 

  

Age: 65

 

 

Director since: January 2013

 

      
 

LOGO

 

  

Former Senior Vice President and Treasurer, PepsiCo, Inc.

 

Other U.S.-Listed Company Boards:

American Electric Power Company, Inc. (through April 2020);

Ecolab Inc.; Textron Inc.

Past Five Years:

British American
Tobacco p.l.c.;

HD Supply Holdings, Inc.; Reynolds American, Inc.; Darden Restaurants, Inc.

 

  

Mr. Nowell’s role as former Treasurer of PepsiCo, Inc. (Pepsi) enables him to bring his strong financial expertise and extensive global perspective in risk management and strategic planning to our Board. Through his public company board service, he has experience in governance, financial reporting, accounting of large international and regulated businesses, and board leadership. Mr. Nowell’s membership on the advisory council at a large, public university provides him with further experience with the oversight of large, complex organizations.

 

 

 

      

Professional highlights:

 

   Served as Senior Vice President and Treasurer of Pepsi, a leading global food, snack, and beverage company, from 2001 to May 2009, and as Chief Financial Officer of The Pepsi Bottling Group and Controller of Pepsi

 

   Served as Senior Vice President, Strategy and Business Development at RJR Nabisco, Inc. from 1998 to 1999

 

   Held various senior financial roles at the Pillsbury division of Diageo plc, including Chief Financial Officer of its Pillsbury North America, Pillsbury Foodservice, and Häagen-Dazs divisions, and also served as Controller and Vice President of Internal Audit of the Pillsbury Company

 

   Member of the Board of Directors of American Electric Power Company, Inc. through April 2020, and its Committee on Directors & Corporate Governance, Executive Committee, Finance Committee, and Policy Committee; member of the Board of Directors of Ecolab Inc. and its Audit Committee and Finance Committee; member of the Board of Directors of Textron Inc. and its Audit and Nominating and Governance Committees

 

Other leadership experience and service:

 

   Currently serves on the Dean’s Advisory Council at The Ohio State University Fisher College of Business

 

   Served as Lead Director of the Board of Directors of Reynolds American, Inc. from January 2017 to July 2017 and as a Board member from September 2007 to July 2017

      

 

      

Denise L. Ramos

 

    

Age: 63

 

 

Director since: July 2019

 

      
 

LOGO

 

  

Former Chief Executive Officer and President, ITT Inc.

 

Other U.S.-Listed Company Boards:

Phillips 66; United Technologies Corporation

Past Five Years: ITT Inc.;

Praxair, Inc.

 

    

Ms. Ramos’s role as former Chief Executive Officer of ITT Inc. (ITT) enables her to bring senior leadership experience to our Board. Further, with her service as Chief Financial Officer at ITT, Furniture Brands International, and the U.S. KFC division of Yum! Brands, Ms. Ramos’ background provides her with financial expertise and extensive strategic planning experience. Ms. Ramos’ public company board service provides her with experience in governance and insight into key issues facing public corporations.

 

 

 

      

Professional highlights:

 

   Former Chief Executive Officer and President of ITT, a diversified manufacturer of critical components and customized technology solutions, from 2011 to 2019; Senior Vice President and Chief Financial Officer of ITT from 2007 to 2011

 

   Served as Chief Financial Officer for Furniture Brands International, a former home furnishings company, from 2005 to 2007

 

   Served in various roles at Yum! Brands Inc., an American fast-food company, from 2000 to 2005, including Chief Financial Officer of the U.S. Division of KFC Corporation and as Senior Vice President and Treasurer

 

   Began her career at Atlantic Richfield Company, where she spent 21 years in a number of finance positions

 

   Member of the Board of Directors of Phillips 66 and its Audit and Finance, Nominating and Governance, and Public Policy Committees; Member of the Board of Directors of United Technologies Corporation and its Audit and Compensation Committees

      

 

2020 PROXY STATEMENT      13


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   Proposal 1: Electing directors   

 

 

      

Clayton S. Rose

 

    

Age: 61

 

 

Director since: October 2018

 

      
 

LOGO

 

  

President, Bowdoin College

 

Other U.S.-Listed Company Boards:

Past Five Years: XL Group, plc; Bank of America Corporation
(2013-2015)

    

Dr. Rose’s service as a senior executive at JPMorgan Chase & Co. and predecessor company J.P. Morgan & Co. (collectively, JPMorgan Chase), including leadership positions in investment banking, equities, securities, derivatives, and corporate finance businesses enables him to bring deep financial, international, and leadership experience to our Board, in addition to broad experience in risk management and strategy with a financial services company. Dr. Rose’s service as President of Bowdoin College and as professor at the Harvard Business School has provided him with opportunities to lead a large and complex organization and to research and analyze current issues in the financial services industry, giving him a valuable and unique perspective on our company’s businesses. Dr. Rose’s extensive financial industry board service gives him further insight into key issues facing financial institutions.

 

 

 

      

Professional highlights:

 

   President of Bowdoin College, 2015 to present

 

   Held various other roles in academia, including Professor of Management Practice at Harvard Business School

 

   Served as Vice Chairman, headed two lines of business–Global Investment Banking and Global Equities–and was a member of JPMorgan Chase’s senior management team during his approximately 20-year tenure at JPMorgan Chase

 

   Served as a member of the Boards of Directors of XL Group, plc, Federal Home Loan Mortgage Corporation (Freddie Mac), and Mercantile Bankshares Corp.

 

Other leadership experience and service:

 

   Currently serves on the Board of Trustees for the Howard Hughes Medical Institute and chairs its Audit and Compensation Committee

 

   Served on the company’s Board of Directors from 2013 to 2015

 

      

 

      

Michael D. White

 

    

Age: 68

 

 

Director since: June 2016

 

      
 

LOGO

 

  

Former Chairman, President, and Chief Executive Officer of DIRECTV

 

Other U.S.-Listed Company Boards: Kimberly-Clark Corporation; Whirlpool Corporation

Past Five Years: DIRECTV

 

    

Mr. White’s roles as the former Chief Executive Officer and Chairman of the Board of Directors of DIRECTV enable him to bring his experience in technology, consumer businesses, and financial expertise to our Board. Mr. White has experience leading a large and highly regulated business. Through his position as Chief Executive Officer of PepsiCo International, Mr. White has international experience as well as broad knowledge of retail and distribution issues. Through his service on public company boards, he has board-level experience overseeing large, complex public companies in various industries, which provides him with valuable insights on the compensation practices and accounting of large, international businesses.

 

 

 

      

Professional highlights:

 

   Served as Chairman, President and Chief Executive Officer of DIRECTV, a leading provider of digital television entertainment services, from January 2010 to August 2015, and as a Director of the company from November 2009 until August 2015

 

   Chief Executive Officer of PepsiCo International from February 2003 until November 2009; and served as Vice Chairman and director of PepsiCo from March 2006 to November 2009, after holding positions of increasing importance with PepsiCo since 1990

 

   Served as Senior Vice President at Avon Products, Inc.

 

   Served as a Management Consultant at Bain & Company and Arthur Andersen & Co.

 

   Member of the Board of Directors of Kimberly-Clark Corporation, Chair of its Audit Committee, and member of its Executive Committee; Member of the Board of Directors of Whirlpool Corporation, Chair of its Audit Committee, and member of its Corporate Governance and Nominating Committee

 

Other leadership experience and service:

 

   Member of the Boston College Board of Trustees

 

   Vice Chairman of The Partnership to End Addiction and Vice-Chairman of the Mariinsky Foundation of America, which supports the Mariinsky Opera, Ballet, and Orchestra and the Academy for young singers and the young musicians’ orchestra

 

      

 

14      BANK OF AMERICA


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   Proposal 1: Electing directors   

 

 

      

Thomas D. Woods

 

    

Age: 67

 

 

Director since: April 2016

 

      
 

LOGO

 

  

Former Vice Chairman and Senior Executive Vice President of CIBC

 

Former Chairman, Hydro One Limited

 

    

Mr. Woods’s career at Canadian Imperial Bank of Commerce (CIBC) enables him to bring his deep experience in risk management, corporate strategy, finance, and the corporate and investment banking businesses to our Board. As Senior Executive Vice President and Chief Risk Officer of CIBC during the financial crisis, Mr. Woods focused on risk management and CIBC’s risk culture. Mr. Woods chaired CIBC’s Asset Liability Committee, served as CIBC’s lead liaison with regulators, and was an active member of CIBC’s business strategy group.

 

 

 

      

Professional highlights:

 

   Served as Vice Chairman and Senior Executive Vice President of CIBC, a leading Canada-based global financial institution, from July 2013 until his retirement in December 2014

 

   Served as Senior Executive Vice President and Chief Risk Officer of CIBC from 2008 to July 2013, and Senior Executive Vice President and Chief Financial Officer of CIBC from 2000 to 2008

 

   Employed at Wood Gundy, a CIBC predecessor firm, starting in 1977; served in various senior leadership positions, including as Controller of CIBC, as Chief Financial Officer of CIBC World Markets (CIBC’s investment banking division), and as the Head of CIBC’s Canadian Corporate Banking division

 

   Member of the Board of Directors of MLI and chair of its Risk Committee (subject to U.K. regulatory approval)

 

Other leadership experience and service:

 

   Currently serves as a member of the Board of Directors of Alberta Investment Management Corporation, a Canadian institutional investment fund manager, and on the investment advisory committee of Cordiant Capital Inc., a fund manager specializing in emerging markets

 

   Served as Chair of the Board of Directors of Hydro One Limited, an electricity transmission and distribution company serving the Canadian province of Ontario, and publicly traded and listed on the Toronto Stock Exchange, from August 2018 to July 2019

 

   Former member of the Board of Directors of Jarislowsky Fraser Limited, a global investment management firm, from 2016 to 2018, former member of the Boards of Directors of DBRS Limited and DBRS, Inc., an international credit rating agency, from 2015 to 2016, and former member of the Board of Directors of TMX Group Inc., a Canada-based financial services company, from 2012 to 2014

 

   Currently serves on the board of advisors of the University of Toronto’s Department of Mechanical and Industrial Engineering

 

      

 

      

R. David Yost

 

    

Age: 72

 

 

Director since: August 2012

 

      
 

LOGO

 

  

Former Chief Executive Officer, AmerisourceBergen

 

Other U.S.-Listed Company Boards:

Johnson Controls International plc; Marsh & McLennan Companies, Inc.

Past Five Years: Exelis Inc.

 

    

Mr. Yost’s roles as the former Chief Executive Officer of AmerisourceBergen Corporation (AmerisourceBergen) and its predecessor company enable him to bring his broad experience in strategic planning, risk management, and operational risk to our Board. In addition, Mr. Yost has experience leading a large, complex business. Through his service on public company boards, he has board-level experience overseeing large, complex public companies in various industries, which provides him with valuable insights on corporate governance and risk management.

 

 

 

      

Professional highlights:

 

   Served as Chief Executive Officer of AmerisourceBergen, a pharmaceutical services company providing drug distribution and related services to healthcare providers and pharmaceutical manufacturers, from 2001 until his retirement in July 2011, and as President from 2001 to 2002 and again from September 2007 to November 2010

 

   Held various positions at AmerisourceBergen and its predecessor companies during a nearly 40-year career, including Chief Executive Officer from 1997 to 2001 and Chairman from 2000 to 2001 of Amerisource Health Corporation

 

   Member of the Board of Directors of Johnson Controls International plc and its Corporate Governance Committee; Member of the Board of Directors of Marsh & McLennan Companies, Inc., and its Compensation Committee, Directors and Governance Committee, and Finance Committee

      

 

2020 PROXY STATEMENT      15


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   Proposal 1: Electing directors   

 

 

      

Maria T. Zuber

 

    

Age: 61

 

 

Director since: December 2017

 

      
 

LOGO

 

  

Vice President for Research and E. A. Griswold Professor of Geophysics, MIT

 

Other U.S.-Listed Company Boards:

Textron Inc.

 

    

In her role as Vice President for Research at Massachusetts Institute of Technology (MIT), Dr. Zuber oversees multiple laboratories and research centers and is also responsible for intellectual property and research integrity and compliance, as well as research relationships with the federal government. Dr. Zuber’s role as Senior Research Scientist and experiences in leadership roles on nine space exploratory missions with the National Aeronautics and Space Administration (NASA) enable her to bring a breadth of risk management, geopolitical insights, and strategic planning proficiencies to our Board.

 

 

 

      

Professional highlights:

 

   Vice President for Research at MIT, a leading research institution, since 2013

 

   Senior Research Scientist at NASA since 2010, serving in 2012 as Principal Investigator of the Gravity Recovery and Interior Laboratory, or GRAIL, mission, which was designed to create the most accurate gravitational map of the moon to date and give scientists insight into the moon’s internal structure, composition, and evolution

 

   Served as a Professor at MIT since 1995, and was Head of the Earth, Atmospheric, and Planetary Sciences Department from 2003 to 2011

 

   Served as Scientist at NASA from 1993 to 2010, and as a Geophysicist from 1986 to 1992

 

   Member of the Board of Directors of Textron Inc. and its Nominating and Corporate Governance, and Organization and Compensation Committees

 

Other leadership experience and service:

 

   Appointed by President Obama in 2013 and reappointed by President Trump in 2018 to the National Science Board, a 25-member panel that serves as the governing board of the National Science Foundation and as advisors to the President and Congress on policy matters relating to science and engineering; served as Board Chair from 2016 to 2018

 

   Currently serves as a member of the Board of Directors and Executive Committee of The Massachusetts Green High Performance Computing Center, a joint venture by Massachusetts universities, which provides infrastructure for computationally intensive research

 

   Currently serves on the Board of Fellows of Brown University

 

      

Communicating with our Board

Shareholders and other parties may communicate with our Board, any director (including our Chairman of the Board or Lead Independent Director), independent members of our Board as a group, or any committee. Depending on the nature of the communication, the correspondence either will be forwarded to the director(s) named or the matters will be presented periodically to our Board. The Corporate Secretary or the secretary of the designated committee may sort or summarize the communications as appropriate. Communications that are personal grievances, commercial solicitations, customer complaints, incoherent, or obscene will not be communicated to our Board or any director or committee of our Board.

Any shareholder who wishes to recommend a director candidate for consideration by our Corporate Governance, ESG, and Sustainability Committee must submit a written recommendation to our Corporate Secretary. For our 2021 annual meeting of shareholders, the Committee will consider recommendations received by October 15, 2020. The recommendation must include the information set forth in our Corporate Governance Guidelines. See page 28 for information on how to obtain a copy of our Corporate Governance Guidelines.

Communications should be addressed to our Corporate Secretary at Bank of America Corporation, Bank of America Corporate Center, 100 North Tryon Street, NC1-007-56-06, Charlotte, North Carolina 28255. For further information, refer to the “Contact the Board of Directors” section under the heading “Corporate Governance—Officers and Directors” on our website at http://investor.bankofamerica.com.

 

16      BANK OF AMERICA


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   Corporate governance   

 

 

CORPORATE GOVERNANCE

Our Board of Directors

 

Our Board and its committees oversee:

 

    Management’s development and implementation of a multi-year strategic business plan and an annual financial operating plan, and our progress meeting these strategic and financial plans

 

    Management’s identification, measurement, monitoring, and control of our company’s material risks, including operational (including conduct, model, and cyber risks), credit, market, liquidity, compliance, strategic, and reputational risks

 

    Our company’s maintenance of high ethical standards and effective policies and practices to protect our reputation, assets, and business

 

    Our corporate audit function, our independent registered public accounting firm, and the integrity of our consolidated financial statements

 

    Our company’s establishment, maintenance, and administration of appropriately designed compensation programs and plans

Our Board and its committees are also responsible for:

 

  Reviewing, monitoring, and approving succession plans for our Board’s Chairman and Lead Independent Director, and for our CEO and other key executives to promote senior management continuity  

 

  Conducting an annual, formal self-evaluation of our Board and its committees  

 

  Identifying and evaluating director candidates, and nominating qualified individuals for election to serve on our Board  

 

  Reviewing our CEO’s performance and approving the total annual compensation for our CEO and other executive officers  

 

  Reviewing our environmental, social, and governance (ESG) initiatives, including our human capital management policies and practices  

 

  Overseeing and participating in our shareholder engagement activities to ascertain perspectives and topics of interest from our shareholders  
 

Director independence

The New York Stock Exchange (NYSE) listing standards require a majority of our directors and each member of our Audit Committee, Compensation and Human Capital Committee, and Corporate Governance, ESG, and Sustainability Committee to be independent. The Federal Reserve Board’s Enhanced Prudential Standards require the chair of our Enterprise Risk Committee to be independent. In addition, our Corporate Governance Guidelines require a substantial majority of our directors to be independent. Our Board has adopted Director Independence Categorical Standards (Categorical Standards), published on our website at http://investor.bankofamerica.com, to assist it in determining each director’s independence. Our Board considers directors or director nominees “independent” if they meet the criteria for independence in both the NYSE listing standards and our Categorical Standards.

In early 2019, our Board, in coordination with our Corporate Governance, ESG, and Sustainability Committee, evaluated the relevant relationships between each director/director nominee (and his or her immediate family members and affiliates) and Bank of America Corporation and its subsidiaries and affirmatively determined that all of our directors/director nominees are independent, except for Mr. Moynihan due to his employment by our company. Specifically, the following 16 of our 17 directors/director nominees are independent under the NYSE listing standards and our Categorical Standards: Ms. Allen, Ms. Bies, Mr. Bovender, Mr. Bramble, Mr. de Weck, Mr. Donald, Ms. Hudson, Ms. Lozano, Mr. May, Mr. Nowell, Ms. Ramos, Dr. Rose, Mr. White, Mr. Woods, Mr. Yost, and Dr. Zuber.

In making its independence determinations, our Board considered the following ordinary course, non-preferential relationships that existed during the preceding three years and those transactions reported under “Related person and certain other transactions” on page 40, and determined that none of the relationships constituted a material relationship between the director/director nominee and our company:

 

 

Our company or its subsidiaries provided ordinary course financial products and services to all of our directors/director nominees, some of their immediate family members, and entities affiliated with some of them or their immediate family members (Mr. de Weck, Mr. Donald, Mr. May, and Dr. Rose). In each case, the fees we received for these products and services were below the thresholds of the NYSE listing standards and our Categorical Standards, and, where applicable, were less than 2% of the consolidated gross annual revenues of our company and of the other entity.

 

 

Our company or its subsidiaries purchased products or services in the ordinary course from entities where some of our directors/director nominees are executive officers or employees or their immediate family members serve or served in the past three years as executive officers (Mr. Donald, Mr. May, Dr. Rose, and Mr. Woods). In each case, the fees paid to each of these entities were below the thresholds of the NYSE listing standards and our Categorical Standards.

 

2020 PROXY STATEMENT      17


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   Corporate governance   

 

 

Independent board leadership

Our Board is committed to objective, independent leadership for our Board and each of its committees. Our Board views the active, objective, independent oversight of management as central to effective Board governance, to serving the best interests of our company and our shareholders, and to executing our strategic objectives and creating long-term value. This commitment is reflected in our company’s governing documents, including our Bylaws, our Corporate Governance Guidelines, and the governing documents of each of the Board’s committees.

Our Board leadership structure

Our Board believes that its optimal leadership structure may change over time to reflect our company’s evolving needs, strategy, and operating environment; changes in our Board’s composition and leadership needs; and other factors, including the perspectives of shareholders and other stakeholders. In accordance with a 2014 amendment to our Bylaws, which our shareholders ratified at a special meeting in 2015, our Board has the flexibility to determine the Board leadership structure best suited to the needs and circumstances of our company and our Board. Our shareholders reaffirmed their support for allowing this flexibility by voting against shareholder proposals seeking Bylaw amendments requiring an independent Chairman at each of our 2017 and 2018 annual meetings of shareholders. At least annually, our Board, in coordination with our Corporate Governance, ESG, and Sustainability Committee, deliberates on and discusses the appropriate Board leadership structure, including the considerations described above.

Under our Board’s current leadership structure, we have a Chairman and a Lead Independent Director. Our Lead Independent Director is empowered with, and exercises, robust, well-defined duties. Our Board is composed of experienced and committed independent directors (with all non-management nominees being independent). Our Board committees have objective, experienced chairs and members. All our directors are required to stand for election annually. Our Board, under leadership of the Lead Independent Director, is committed to engaging with shareholders and other stakeholders. Our Board believes that these factors, taken together, provide for objective, independent Board leadership, effective engagement with and oversight of management, and a voice independent from management and accountable to shareholders and other stakeholders.

Our Board, through its annual assessment, with input from shareholders, believes that the existing structure, with Mr. Moynihan as Chairman and Mr. Bovender as Lead Independent Director, continues to be the optimal leadership framework at this time. As a highly regulated global financial services company, we and our shareholders benefit from an executive Chairman with deep experience and leadership in and knowledge of the financial services industry, our company, its businesses, and our focus on Responsible Growth. We and our shareholders also benefit from a Lead Independent Director who is empowered with, and exercises, robust, well-defined duties (see next page for a list of the duties); who is highly engaged and holds regular meetings with our primary regulators, our independent directors, and our CEO and other management members, and plays a leading role in our shareholder engagement process (see page 29).

Our Lead Independent Director, together with the other independent directors, exemplifies objective independent Board leadership, and effectively engages and oversees management. The Lead Independent Director is joined by experienced, independent Board members and a Chairman who, as CEO, serves as the primary voice to articulate our long-term strategy and our Responsible Growth. The independent directors provide objective oversight of management, review the CEO’s performance and approve CEO compensation, help to establish the long-term strategy and regularly assess its effectiveness, and serve the best interests of our company and our shareholders by overseeing management’s work to create long-term value.

 

 

 

Highly engaged Lead Independent Director

 

The formalized list of duties of the Lead Independent Director does not fully capture Mr. Bovender’s active role in serving as our Board’s independent leader. Among other things, Mr. Bovender:

 

  Holds quarterly calls with our primary bank regulators to discuss any issues of concern

 

  Regularly speaks with our CEO and holds bi-weekly calls to discuss Board meeting agendas and discussion topics, schedules, and other Board governance matters

 

  Attends meetings of all of the Board committees

 

  Speaks with each Board member at least quarterly to receive input on Board agendas, Board effectiveness, Board planning matters, and other related topics of management oversight

 

  Meets at least quarterly with management members, including: the Chief Administrative Officer; Chief Financial Officer; Chief Risk Officer; Chief Human Resources Officer; and Global Compliance, Operational Risk, Reputational Risk and Control Function Risk Executive

 

  Plays a leading role in our shareholder engagement process, representing our Board and independent directors in investor meetings. In 2019 and in early 2020, Mr. Bovender met with many of our largest shareholders and other stakeholders, often in person, and in aggregate, personally met with investors who own approximately 28% of all outstanding shares

 

 

 

18      BANK OF AMERICA


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   Corporate governance   

 

 

Board leadership succession planning

Our Corporate Governance Guidelines include an emergency succession plan for our Lead Independent Director and Board Chairman that provides for an orderly, interim succession process in the event of extraordinary circumstances. In addition, our Corporate Governance, ESG, and Sustainability Committee has a process for implementing an orderly independent director leadership transition for our Lead Independent Director. Our Corporate Governance Guidelines provide that an individual who would be age 75 at the time of election shall not be nominated for initial election to the Board, however the Board may approve the nomination for reelection of a director who would be age 75 at the time of election, if, in light of all the circumstances, the Board determines that it is in the best interests of the Corporation and its shareholders. Mr. Bovender will reach age 75 prior to the 2021 annual meeting of shareholders, and therefore is expected to retire from our Board as of that meeting. In anticipation of his retirement and in order to assure an orderly transition, our Corporate Governance, ESG, and Sustainability Committee has devoted and is expected to continue to devote considerable time and attention to succession planning for the Lead Independent Director role. The Committee takes into account a number of factors during the planning process, including key skills and competencies of the Lead Independent Director position, professional and personal attributes believed to be necessary to successfully act as Lead Independent Director, and other factors the Committee will deem to be relevant to recommending a successor to the independent directors for their consideration.

 

   

 

Well-defined duties of our Lead Independent Director

 

  

 

Board leadership

 

  Presiding at all meetings of our Board at which the Chairman is not present, including at executive sessions of the independent directors

 

  Calling meetings of the independent directors, as appropriate

 

  If our CEO is also Chairman, providing Board leadership if the CEO/Chairman’s role may be (or may be perceived to be) in conflict

 

Board focus

 

  Board focus: In consultation with our Board and executive management, providing that our Board focuses on key issues and tasks facing our company, and on topics of interest to our Board

 

  Corporate governance: Assisting our Board, our Corporate Governance, ESG, and Sustainability Committee, and management in complying with our Corporate Governance Guidelines and promoting corporate governance best practices

 

  CEO performance review and succession planning: Working with our Corporate Governance, ESG, and Sustainability Committee, our Compensation and Human Capital Committee, and members of our Board, contributing to the annual performance review of the CEO and participating in CEO succession planning

 

Board meetings

 

  In coordination with the CEO and the other members of our Board, planning, reviewing, and approving meeting agendas for our Board

 

  In coordination with the CEO and the other members of our Board, approving meeting schedules to provide for sufficient time for discussion of all agenda items

 

  Advising the CEO of the information needs of our Board and approving information sent to our Board

 

  Developing topics of discussion for executive sessions of our Board

 

      

Board culture

 

  Serving as a liaison between the CEO and the independent directors

 

  Establishing a close relationship and trust with the CEO, providing support, advice, and feedback from our Board while respecting executive responsibility

 

  Acting as a “sounding board” and advisor to the CEO

 

Board performance and development

 

  Board performance: Together with the CEO and the other members of our Board, promoting the efficient and effective performance and functioning of our Board

 

  Board evaluation: Consulting with our Corporate Governance, ESG, and Sustainability Committee on our Board’s annual self-evaluation

 

  Director development: Providing guidance on the ongoing development of directors

 

  Director assessment/nomination: With our Corporate Governance, ESG, and Sustainability Committee and the CEO, consulting in the identification and evaluation of director candidates’ qualifications (including candidates recommended by directors, management, third-party search firms, and shareholders) and consulting on committee membership and committee chairs

 

Shareholders and other stakeholders

 

  Being available for consultation and direct communication, to the extent requested by major shareholders

 

  Having regular communication with primary bank regulators (with or without management present) to discuss the appropriateness of our Board’s oversight of management and our company

 

 

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Board evaluation

Our Board and our Board Committees continuously evaluate their own effectiveness throughout the year. The evaluation is a multi-faceted process that includes quarterly one-on-one discussions with our Lead Independent Director, individual director input on Board and committee meeting topical agenda subjects, executive sessions without management present, periodic input to our CEO and senior management on topical agendas and enhancements to Board and committee effectiveness, and an annual formal self-evaluation developed and administered under the direction of the Corporate Governance, ESG, and Sustainability Committee.

 

 

LOGO

One-on-one discussions with the Lead Independent Director

In addition to the formal annual Board and committee evaluation process, our Lead Independent Director speaks with each Board member at least quarterly, and receives input regarding Board and committee practices and management oversight. Throughout the year, committee members also have the opportunity to provide input directly to committee chairs or to management.

Formal self-evaluation

 

Information from research commissioned by the Board on the characteristics of highly effective and efficient boards identified five key areas where the research suggested high functioning boards and committees excelled. Our Corporate Governance, ESG, and Sustainability Committee developed the formal 2019 self-evaluation to solicit director feedback on these key areas, the results of which are shared with management as appropriate. The Committee also considered industry trends, practices of our peers, feedback from shareholders, and regulatory developments. For the formal 2019 self-evaluation, the Committee continued to solicit director views on actions taken in response to the prior year’s evaluation results. As part of its ongoing review of Board and committee composition, the Committee also continued to seek input on the Board’s director succession planning process.

   

 

Key areas: Highly effective boards          

 

 

 

 

     LOGO

 

 

 

 

        Board and committee composition

 

     LOGO

 

 

        Board culture

 

 

 

     LOGO

 

 

 

        Board and committee focus

 

 

 

     LOGO

 

 

 

        Board process

 

 

     LOGO

 

 

        Information and resources

 

   
   

Composition. Through the self-evaluation process, our Board identifies qualities, relevant skills, and experience of potential director candidates that are consistent with the company’s current strategy, allow the Board to effectively perform its risk oversight responsibilities, and that would add to the Board’s diversity.

Board culture. Our Board considers its role in setting the standard for the company’s culture and values by forging a collegial and collaborative dynamic that values independent judgment and emphasizes accountability. As part of this review, directors evaluate how they interact among themselves, and with management, including the importance of challenging and holding management accountable, and their relationships with investors.

 

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Focus. Our Board and committees consider their critical oversight responsibilities, including strategy, risk, and ESG, and succession planning for the Board and the Lead Independent Director. Our Board and committees continuously reassess their focus and regularly engage in dialogue and solicit feedback from management, shareholders, and other stakeholders and receive third-party perspectives on the competitive environment, opportunities for growth, macroeconomic trends, geopolitics, and cyber and information security.

Process. As part of the self-evaluation process, directors review overall Board and committee structure, quality of meeting materials and presentations, agenda topics, and other meeting processes. Each of our directors meets with management and with our Lead Independent Director through a combination of executive sessions, smaller group sessions, and one-on-one meetings. Directors are focused on Board and committee meeting structure so as to allow ample time for discussion, debate, and in-depth review of key topics and trends.

Information and resources. Through the self-evaluation process, our Board and committees evaluate the materials, education, and training opportunities they receive both from management and outside advisors and experts. Our directors continue to highlight the need for clear, comprehensive, and concise information to effectively support their oversight responsibilities. In particular, directors have highlighted the importance of well-organized, streamlined, and accessible materials that identify key issues in a timely manner.

Enhancements made in response to formal Board self-evaluations

In response to feedback solicited from our Board and committees in 2019, we continue to:

 

  Streamline meeting materials to better highlight important information, while maintaining completeness, and providing timely updates, as needed

 

  Provide a wide range of opportunities for our Board to interact with employees throughout the organization, both formally and informally

 

  Enhance discussion about Board leadership succession planning and committee membership

 

  Invite directors to participate in a broad range of company-sponsored events, including participating in employee leadership events and affinity network activities

 

  Refine meeting structure to allow sufficient time during Board and committee meetings for discussion, debate, in-depth reviews, and executive sessions

 

  Enhance presentations for Board and committee meetings so that they complement and add insight beyond written meeting materials while leaving ample time for question and answer sessions and other discussion

 

  Enhance discussion about areas of emerging risk at Board and Enterprise Risk Committee meetings, including deep dives on key topics, and add to the ongoing review of and information on cybersecurity risk oversight

 

  Add to the range of information on ESG and human capital management-related topics at the Board and committee level

 

  Provide opportunities for one-on-one discussions between directors and management on critical issues and continued opportunities for dialogue at our annual Board strategic planning session

 

  Provide educational opportunities during regularly scheduled meetings and through access to third-party programs, with an emphasis on topics requested by directors and current events and trends

 

  Provide third-party perspectives on the company, peers, industry, and economy, and shareholder and stakeholder feedback in Board and committee materials and presentations and through additional resources
 

Director education

Our Board believes that director education is vital to the ability of directors to fulfill their roles, and supports Board members in their continuous learning. The Board encourages directors to participate annually in external continuing director education programs, and our company reimburses directors for their expenses associated with this participation. Our directors also attend forums and conferences convened by our primary banking regulators. Continuing director education is also provided during Board meetings and other Board discussions as part of the formal meetings, and as stand-alone information sessions outside of meetings. Among other topics, during 2019, our Board heard from our primary banking regulators and from management on numerous subjects, including ESG matters, cybersecurity, conduct, digital banking, lending and financial advice, payments, human capital management, and updates on current geopolitical events.

All new directors also participate in our director orientation program during their first six months on our Board. New directors have a series of meetings over time with management representatives from all of our business and staff areas to review and discuss, with increasing detail, information about our company, industry, and regulatory framework. Based on input from our directors, we believe this gradual on-boarding approach over the first six months of Board service, coupled with participation in regular Board and committee meetings, provides new directors with a strong foundation in our company’s businesses, connects directors with members of management with whom they will interact and oversee, and accelerates their effectiveness to engage fully in Board

 

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deliberations. Directors have access to additional orientation and educational opportunities upon acceptance of new or additional responsibilities on the Board and in committees.

CEO and senior management succession planning

Our Board oversees CEO and senior management succession planning, which is formally reviewed at least annually; two such planning sessions were held in 2019. Our CEO and our Chief Human Resources Officer provide our Board with recommendations and evaluations of potential CEO successors, and review their development progress. Our Board reviews potential internal senior management candidates with our CEO and our Chief Human Resources Officer, including the qualifications, experience, and development priorities for these individuals. Directors engage with potential CEO and senior management successors at Board and committee meetings and in less formal settings to allow directors to personally assess candidates. Further, our Board periodically reviews the overall composition of our senior management’s qualifications, tenure, and experience.

Our Board also establishes steps to address emergency CEO and senior management succession planning in extraordinary circumstances. Our emergency CEO succession planning is intended to enable our company to respond to unexpected position vacancies, including those resulting from a major catastrophe, by continuing our company’s safe and sound operation and minimizing potential disruption or loss of continuity to our company’s business and operations.

Board meetings, committee membership, and attendance

Directors are expected to attend our annual meetings of shareholders and our Board and committee meetings. Each of our incumbent directors attended at least 75% of the aggregate meetings of our Board and the committees on which they served during 2019. In addition, with the exception of Dr. Zuber, all of the directors serving on our Board at the time of our 2019 annual meeting attended the meeting.

Our independent directors meet privately in executive session without our Chairman and CEO or other members of management present at regularly scheduled Board meetings and held 14 such executive sessions in 2019. Our Lead Independent Director leads these Board executive sessions.

Our Board has four committees. Charters describing the responsibilities of each of the Audit Committee, Compensation and Human Capital Committee, Corporate Governance, ESG, and Sustainability Committee, and Enterprise Risk Committee can be found at http://investor.bankofamerica.com, and their membership is set forth on page 2.

Prior to January 2020, the Compensation and Human Capital Committee was named the Compensation and Benefits Committee, and the Corporate Governance, ESG, and Sustainability Committee was named the Corporate Governance Committee. The Board changed the names of these committees to more accurately reflect their respective oversight of human capital management, ESG, and sustainability matters.

 

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Our Board committees regularly make recommendations and report on their activities to the entire Board. Each committee may obtain advice from internal or external financial, legal, accounting, or other advisors at their discretion. Our Board, in considering the recommendations of our Corporate Governance, ESG, and Sustainability Committee, reviews our committee charters and committee membership at least annually. The duties of our committees are summarized below:

 

   

Audit

 

Key responsibilities

 

  Oversees qualifications, performance, and independence of our company’s independent registered public accounting firm

 

  Oversees performance of our company’s corporate audit function

 

  Oversees integrity of our company’s consolidated financial statements’ preparation

 

  Oversees our compliance with legal and regulatory requirements

 

  Makes inquiries of management or of the Chief Audit Executive to assess the scope and resources necessary for the corporate audit function to execute its responsibilities

 

Independence / qualifications

 

  All Committee members are independent under the NYSE listing standards and our Categorical Standards and the heightened independence requirements applicable to audit committee members under Securities and Exchange Commission (SEC) rules

 

  All Committee members are financially literate in accordance with NYSE listing standards and qualify as audit committee financial experts under SEC rules

 

    

Enterprise Risk

 

Key responsibilities

 

  Oversees our company’s overall Risk Framework, risk appetite, and management of key risks

 

  Approves the Risk Framework and Risk Appetite Statement and further recommends each to the Board for approval

 

  Oversees management’s alignment of our company’s risk profile to our strategic and financial plans

 

  Oversees management’s progress in developing our company’s Comprehensive Capital Analysis and Review submission to the Federal Reserve Board, and reviews and recommends our company’s Capital Plan to the Board for approval

 

  Reviews and recommends our company’s Resolution and Recovery Plans to the Board for approval

 

Independence / qualifications

 

  All Committee members are independent under the NYSE listing standards and our Categorical Standards

 

  All Committee members satisfy the risk expertise requirements for directors of a risk committee under the Federal Reserve Board’s Enhanced Prudential Standards

    
   

Compensation and Human Capital

 

Key responsibilities

 

  Oversees establishing, maintaining, and administering our compensation programs and employee benefit plans

 

  Approves and recommends our CEO’s compensation to the Board for further approval by all independent directors, and reviews and approves all of our other executive officers’ compensation

 

  Recommends director compensation for Board approval

 

  Reviews our human capital management practices

 

Independence / qualifications

 

  All Committee members are independent under the NYSE listing standards and our Categorical Standards and the independence requirements applicable to compensation committee members under NYSE rules and the heightened independence requirements (similar to those applicable to Audit Committee members) under SEC rules

 

    

Corporate Governance, ESG, and Sustainability

 

Key responsibilities

 

  Oversees the Board’s governance processes

 

  Identifies and reviews the qualifications of potential Board members; recommends nominees for election to the Board

 

  Leads the Board in Board and committee succession planning

 

  Leads the Board and its committees in their formal annual self-evaluations

 

  Reviews and reports to the Board on our ESG activities

 

  Reviews and assesses shareholder input and our shareholder engagement process

 

Independence / qualifications

 

  All Committee members are independent under the NYSE listing standards and our Categorical Standards

 

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Board oversight of risk

At Bank of America, we are guided by a common purpose to make financial lives better by connecting those we serve with the resources they need to be successful. Our purpose and values form the foundation of our culture—a culture that is rooted in accountability, disciplined risk management, and delivering together as a team to better serve our clients, strengthen our communities, and deliver value to our shareholders. This all comes together as an engine for sustainable Responsible Growth. Our culture comes from how we run the company every day, by acting responsibly and managing risk well, which includes our commitments to ethical behavior, acting with integrity, and complying with laws, rules, regulations, and policies that reinforce such behavior. Managing risk is central to everything we do. Our success relies on the intellectual curiosity and sound judgment of every employee across the company.

Conduct and culture

Our Board and its committees play a key role in oversight of our culture, setting the “tone at the top” and holding management accountable for its maintenance of high ethical standards and effective policies and practices to protect our reputation, assets, and business. Our Board and its committees do this in a number of ways, including by:

 

  focusing on the character, integrity, and qualifications of their respective members, and their respective leadership structures and composition;

 

  overseeing management’s identification, measurement, monitoring, and control of our material risks, including compliance risk and conduct risk;

 

  regularly requesting and receiving briefings from senior management on matters relating to compliance and business conduct risk;
  holding management accountable for the timely escalation of issues for review with the Board and its committees; and

 

  overseeing our incentive plan design and governance processes to provide for an appropriate balance of risk and compensation outcomes.
 

Our risk governance documents

Risk is inherent in all of our business activities. One of our tenets of Responsible Growth is: “we must grow within our risk framework.” We execute on that strategy through our commitment to responsible and rigorous risk management and through a comprehensive approach with a defined Risk Framework and a well-articulated Risk Appetite Statement. The Risk Framework and Risk Appetite Statement are regularly reviewed with an eye towards enhancements and improvements. The Risk Framework sets forth clear roles, responsibilities, and accountability for the management of risk and describes how our Board oversees the establishment of our risk appetite and of both quantitative limits and qualitative statements and objectives for our activities. This framework of objective, independent Board oversight and management’s robust risk management better enables us to serve our customers, deliver long-term value for our shareholders, and achieve our strategic objectives.

Our Risk Framework serves as the foundation for consistent and effective risk management. It outlines the seven types of risk that our company faces: strategic risk; credit risk; market risk; liquidity risk; operational risk (including model, conduct, and cyber risk); compliance risk; and reputational risk. It describes components of our risk management approach, including our culture of managing risk well, risk appetite, and risk management processes, with a focus on the role of all employees in managing risk. It also outlines our risk management governance structure, including the roles of our Board, management, lines of business, independent risk management, and corporate audit within the governance structure.

Our Risk Appetite Statement defines the aggregate levels and types of risk our Board and management believe appropriate to achieve our company’s strategic objectives and business plans.

 

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Our risk governance structure

 

 

LOGO

 

Our directors bring relevant risk management oversight experience; see “Our director nominees” on page 5. Our Chief Risk Officer, the company’s senior-most risk manager, reports jointly to the CEO and Enterprise Risk Committee, and participates in Board and Enterprise Risk Committee meetings. This governance structure is designed to complement our Board’s commitment to maintaining an objective, independent Board and committee leadership structure, and to fostering integrity over risk management throughout our company and further demonstrates our commitment to a strong culture of compliance, governance, and ethical conduct.

We believe our holistic, ongoing Board and committee risk oversight process provides the foundation for consistent and effective management of risks facing our company and demonstrates our commitment to a culture of rigorous risk management and compliance. Details of our company’s risk management policies and practices are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2019 Annual Report.

Board oversight of cybersecurity and information security risk

Our Board recognizes the importance of maintaining the trust and confidence of our customers, clients, and employees. As a part of its objective, independent oversight of the key risks facing our company, the Board devotes significant time and attention to data and systems protection, including cybersecurity and information security risk.

The Board oversees management’s approach to staffing, policies, processes, and practices sufficient to effectively gauge and address cybersecurity and information security risk. Our Board and Enterprise Risk Committee each receive regular presentations and reports throughout the year on cybersecurity and information security risk. These presentations and reports address a broad range of topics, including updates on technology trends, regulatory developments, legal issues, policies and practices, the threat environment and vulnerability assessments, and specific and ongoing efforts to prevent, detect, and respond to internal and external critical threats. At least twice each year, the Board discusses cybersecurity and information security risks with our Chief Operations and Technology Officer and our Chief Information Security Officer.

 

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Additionally, our Board receives real-time reports from management on key developments across our industry, as well as specific information about peers, vendors, and other significant incidents.

Our Enterprise Risk Committee also annually reviews and approves our Global Information Security Program and our Information Security Policy, including administrative, technical, and physical safeguards designed to protect the security, confidentiality, and integrity of customer information in accordance with the Gramm-Leach-Bliley Act and the interagency guidelines issued thereunder, and applicable law globally. Our Enterprise Risk Committee’s charter makes explicit the Committee’s responsibility for reviewing cybersecurity and information security risk, as well as steps taken by management to understand and mitigate such risk.

Under the Board’s oversight, management works closely with key stakeholders, including regulators, government agencies, peer institutions, and industry groups, and develops and invests in talent and innovative technology in order to manage cybersecurity and information security risk. Our company has information security employees across the globe, enabling us to monitor and promptly respond to threats and incidents, maintain oversight of third-parties, innovate and adopt new technologies, as appropriate, and drive industry efforts to address shared cybersecurity risks. Each of our employees receives comprehensive education on responsible information security, data security, and cybersecurity practices and how to protect data against cyber threats through our Security Awareness For Everyone program.

 

      

 

LOGO   

 

 

Cybersecurity governance highlights

 

 

    

   

  Comprehensive reporting to our Board and Enterprise Risk Committees (both scheduled and real-time) in response to key developments.

   
     

  Cross-functional approach to addressing cybersecurity risk, with Global Technology & Operations, Risk, Legal, and Corporate Audit functions presenting on key topics.

   
     

  Global presence, with employees and 24/7 cyber threat operations centers around the world.

   
     

  Collaborative approach, working with a wide range of key stakeholders to manage risk, and share and respond to intelligence.

   
             

Compensation governance and risk management

 

      

 

LOGO   

 

 

Key practices in compensation governance and risk management

 

 

    

   

  The independent members of the Board approve CEO compensation, and the Compensation and Human Capital Committee approves compensation for all other executive officers.

   
     

  The Enterprise Risk Committee and Audit Committee further review and approve compensation for the Chief Risk Officer and Chief Audit Executive, respectively.

   
     

  Independent control functions—including Corporate Audit, Compliance, Finance, Human Resources, Legal, and Risk—provide direct feedback to the Compensation and Human Capital Committee on executive officer performance and the pay-for-performance process.

   
     

  Our incentive plan design and governance processes appropriately balance risks with compensation outcomes.

   
       

  Senior management and independent control functions, including risk, annually review and certify our incentive plans.

 

   

Compensation governance

Our Compensation and Human Capital Committee follows procedures intended to promote strong governance of our pay-for-performance philosophy. The Committee regularly reviews: (i) company performance; (ii) our executive compensation strategy, approach, trends, and regulatory developments; and (iii) other related topics, as appropriate. Each year, the Committee reviews, and makes available to our Board, an executive compensation statement, or “tally sheet,” for each executive officer. The tally sheets reflect each executive officer’s total compensation, including base salary, cash and equity-based incentive awards, the value of prior restricted stock unit awards (including the status of achieving any performance goals), qualified and nonqualified

 

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retirement and deferred compensation benefit accruals, and the incremental cost to our company of the executive’s perquisites. The Committee uses this information to evaluate all elements of compensation and benefits provided to an executive officer. Annually, the Committee reviews with our Board its compensation decisions (including cash and equity-based incentive awards, if applicable) for executives who report directly to our CEO. With respect to the CEO’s compensation, the Committee makes a recommendation that is further reviewed and approved by the independent members of the Board. The CEO does not participate in Committee or Board deliberations about his compensation. Additionally, for our Chief Risk Officer and Chief Audit Executive, the Committee’s pay recommendations are further reviewed and approved by our Board’s Enterprise Risk Committee and Audit Committee, respectively.

Executive officers do not engage with the Committee in setting the amount or form of their own individual compensation. During annual performance reviews for executive officers other than our CEO, the Committee considers our CEO’s perspective and incentive award recommendations before approving compensation for each of these executive officers. In addition, the Committee considers the performance of our various lines of business, business segments and functions, as well as performance feedback from our Chief Human Resources Officer and our independent control functions (Corporate Audit, Compliance, Finance, Human Resources, Legal, and Risk).

The Committee has the sole authority and responsibility under its charter to approve engaging any compensation consultant it uses and the fees for those services. The Committee retained Farient Advisors LLC (Farient Advisors) as its 2019 independent compensation consultant. Farient Advisors’ business with us is limited to providing independent executive and director compensation consulting services. Farient Advisors does not provide any other services to our company. For 2019, Farient Advisors provided the Committee external market and performance comparisons, advised the Committee on senior executive, CEO, and director compensation, assisted in evaluating program design, and assisted with other executive and director compensation-related matters. In performing these services, Farient Advisors met regularly with the Committee without management and privately with the Chair of the Committee.

The Committee may delegate to management certain duties and responsibilities regarding our benefit plans. Significant Committee delegations to management include authority to: (i) the Management Compensation Committee to direct the compensation for all of our employees except for our CEO and his direct reports; and (ii) the Corporate Benefits Committee to oversee substantially all of our employee benefit plans. See “Compensation governance structure” on the next page.

Compensation risk management policies and practices

We believe that our company applies prudent risk management practices to its incentive compensation programs across the enterprise. Our Compensation and Human Capital Committee is committed to a compensation governance structure that effectively contributes to our company’s overall risk management policies.

Compensation governance policy. The Committee has adopted and annually reviews our Compensation Governance Policy, which governs our incentive compensation decisions and defines the framework for oversight of enterprise-wide incentive compensation program design. Consistent with global regulatory initiatives, our Compensation Governance Policy requires that our incentive compensation plans do not encourage excessive risk-taking.

 

 

Our Compensation Governance Policy addresses...

 

 

  Definition and process for identifying “risk-taking” employees

 

  Key goals and process for incentive compensation plan design and governance to appropriately balance risks with compensation outcomes, including:

 

O  funding incentive compensation pools

O  determining individual incentive compensation awards

O  use of discretion as part of those processes

 

  

 

  Policies on incentive compensation plan effectiveness through testing and monitoring to confirm that the plans appropriately balance risks with compensation outcomes, including developing processes to administer cancellations and clawbacks

 

  Policies that provide for the independence of our
company’s independent control functions and their appropriate input to the Committee

 

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Compensation governance structure. Our compensation governance structure allocates responsibility so that our Board, Compensation and Human Capital Committee, or the appropriate management-level governing body makes compensation decisions with documented input from the independent control functions. This approach promotes effective oversight and review, and facilitates the appropriate governance to balance risk and reward. Below is an illustration of our compensation governance structure, which is influenced by internal considerations and external factors:

 

 

LOGO

Incentive plan certification process. Pursuant to our Compensation Governance Policy, our annual incentive plan certification and review process provides for a comprehensive review, analysis, and discussion of incentive design and operation. As part of the governance for incentive plans, each of the CEO’s direct reports, along with their management teams and independent control functions (including their respective risk officers), meet periodically to discuss how business strategy, performance, and risk align to compensation. The relevant participants certify that the incentive programs they review: (i) are aligned with the applicable lines of business and our company’s business strategy and performance objectives, (ii) do not encourage excessive or imprudent risk-taking beyond our company’s ability to effectively identify and manage risk, (iii) are compatible with effective controls and risk management, and (iv) do not incentivize impermissible proprietary trading. Our Chief Risk Officer also certifies all incentive plans across our company as part of the Management Compensation Committee’s governance process. Farient Advisors and the Compensation and Human Capital Committee review these management certifications.

Incentive plan audit reviews. Corporate audit reviews all incentive plans at least every three years, using a risk-based approach that includes reviewing plan design, plan governance, pay execution, and validating incentive plan design and operation against regulatory requirements.

Conduct reviews. As part of our compensation governance practices, management reviews the results of the conduct review process so that conduct is consistently and appropriately considered in performance assessments and pay decisions across the company. These performance and pay outcomes are reviewed at least annually by the Committee.

Independent control function feedback. In addition to reviewing the individual incentive compensation awards for executive officers and other senior executives who report directly to the CEO, the Committee also reviews the outcomes of our control function feedback process and individual incentive compensation awards for certain highly compensated employees. As part of its governance process, the Committee meets with the heads of our independent control functions and business lines during a half-day meeting to discuss their feedback on the pay-for-performance process, including how risk management and conduct matters were factored into compensation decisions.

As a result of these processes and reviews, and in combination with the risk management and clawback features of our compensation programs, we believe that our compensation policies and practices appropriately hold employees accountable, while balancing risks and rewards in a way that does not encourage excessive or imprudent risk-taking or create risks that are reasonably likely to have a material adverse effect on our company.

Hedging policy. Under our Code of Conduct and other policies, all Bank of America directors, executive officers, and certain other designated insiders are prohibited from hedging and speculative trading of Bank of America securities. They may not engage in short sales or trading in puts, calls, and other options or derivatives with respect to our securities. All other employees may not engage in any such transactions other than transactions that hedge against an existing long position in our securities if the shares underlying the position are readily available for sale or delivery. No employee may hedge the value of outstanding restricted stock units or other equity-based awards, and such awards may be forfeited or recouped for violation of our anti-hedging and derivative transactions policies.

Additional corporate governance information

More information about our corporate governance can be found on our website at http://investor.bankofamerica.com under the heading “Corporate Governance,” including our: (i) Certificate of Incorporation; (ii) Bylaws; (iii) Corporate Governance Guidelines (including our related person transactions policy and our Director Independence Categorical Standards); (iv) Code of Conduct and related materials; and (v) composition and charters of each of our Board committees. This information is also available in print, free of charge, upon written request addressed to our Corporate Secretary at Bank of America Corporation, Bank of America Corporate Center, 100 North Tryon Street, NC1-007-56-06, Charlotte, North Carolina 28255.

 

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   Shareholder engagement   

 

 

SHAREHOLDER ENGAGEMENT

We interact with our investors in a variety of ways. Our Board and management regularly engage with our shareholders to solicit their views and input on company performance, corporate governance, ESG, and other topics of interest to them, such as environmental initiatives, human capital management, and executive compensation matters. In addition, our Investor Relations team regularly meets with investors, prospective investors, and investment analysts. These meetings often include participation by our Chairman and CEO, Chief Financial Officer, or line of business leaders, and they generally are focused on company performance, strategy, and Responsible Growth. The combination of information received in investor relations meetings and shareholder engagement meetings provides the Board and management with insights into the comprehensive scope of topics important to our shareholders.

Our shareholder engagement program

Board-driven engagement. Our Corporate Governance, ESG, and Sustainability Committee oversees the shareholder engagement process and regularly reviews and assesses shareholder input. Both our Chairman and our Lead Independent Director play a central role in our Board’s shareholder engagement efforts. Our directors regularly participate in meetings with shareholders.

Commitment codified in governing documents. Our Corporate Governance Guidelines and our Corporate Governance, ESG, and Sustainability Committee’s charter codify our Board’s oversight of shareholder engagement; they reflect our Board’s understanding of the critical role shareholder engagement has as a routine part of our governance.

Year-round engagement and Board reporting. Our Corporate Secretary, Investor Relations, ESG, and Human Resources teams, together with executive management members and directors, conduct regular, year-round outreach to shareholders in-person and by phone to obtain their input on key matters and to inform our management and our Board about the issues that our shareholders tell us matter most to them. Throughout the year, our Corporate Secretary team provides periodic company updates by email to our largest shareholders, driving awareness of our significant corporate governance matters and changes in our Board. We also continue to improve our engagement and communications with our retail shareholders, including employee shareholders.

Transparent and informed governance enhancements. Our Board routinely reviews and improves our governance practices and policies, including our shareholder engagement practices. Shareholder input is regularly shared with our Board, its committees, and management, facilitating a dialogue that provides shareholders with transparency into our governance practices and considerations, and informs our company’s enhancement of those practices. In addition to shareholder sentiments, our Board considers trends in governance practices and regularly reviews the voting results of our meetings of shareholders, the governance practices of our peers and other large companies, and current trends in governance. See page 31 for additional detail on recent governance enhancements our Board implemented.

Our 2019 and early 2020 shareholder engagement initiatives

Our directors and management met with our large shareholders holding approximately 31% of our shares outstanding and key stakeholders throughout 2019 and in early 2020 to obtain their input and to discuss their views on our Board’s independent oversight of management, our Board’s composition and director succession planning and recruitment, and our Board’s oversight of our environmental initiatives and human capital management practices, among other issues important to our shareholders. These views were shared with our Board and its committees, where applicable, for their consideration.

In particular, our Lead Independent Director, the chair of our Compensation and Human Capital Committee, and management met with some of our large shareholders prior to the publication of our 2019 Human Capital Management Report to solicit their input on the disclosures most helpful to increasing investors’ understanding of our culture, and the transparency of our focus and progress on increasing female and people of color representation in our workforce, our equal pay for equal work practices, our focus on employee wellness, and our employee satisfaction and the inverse correlation to employee turnover. Their views helped us shape and informed the report disclosures.

More broadly, we sent updates to our largest 250 shareholders representing 62% of our shares outstanding upon publication of our 2019 Human Capital Management Report on Being a Great Place to Work and the appointment of Ms. Ramos as an independent director.

In addition to engaging with our institutional shareholders, in 2018 we made available video interviews with our directors, which have been updated in March 2019 and 2020, to provide all stakeholders, including our retail shareholders, with the opportunity to hear directly from our Board. The videos address the Board’s governance practices, oversight of management, and our company’s Responsible Growth; they are available at https://about.bankofamerica.com/annualmeeting.

 

2020 PROXY STATEMENT      29


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   Shareholder engagement   

 

 

We significantly enhanced our annual shareholders’ meeting webpage in 2019 and again in 2020 to provide retail and employee shareholders with consolidated information about the matters for their vote, access to our interactive proxy statement, information about our director nominees, and our charitable donation campaign to encourage all retail and employee shareholders to vote their shares.

By the numbers: Depth of shareholder engagement in 2019 and early 2020

 

 

LOGO

 

 

 

LOGO

 

 

 

What we learned from our meetings with shareholders

 

  Shareholders are supportive of our approach to Board composition and refreshment and our deliberate process for director succession planning.

 

  Shareholders understand our approach to Responsible Growth and the important role our ESG practices have in making Responsible Growth sustainable. They appreciated the breadth and depth of our disclosures in these areas, including our commitment to environmental and human capital matters.

 

  Shareholders were instrumental in assisting us in the scope and content of our 2019 Human Capital Management Report, providing valuable insight about the types of information and transparency that would be helpful to their understanding of our human capital practices and how they help drive Responsible Growth.

 

  A strong majority of the institutional shareholders we spoke with believe that our Board should retain the flexibility to determine its leadership structure and that our current Board leadership structure and practices provide appropriate independent oversight of management.

 

  Shareholders appreciated meeting with our Lead Independent Director and hearing directly from him regarding our Board’s oversight of the company’s strategy, risk management practices, our ESG initiatives, and our drive for Responsible Growth.

 

  Shareholders appreciated the broad access to senior management subject matter experts regarding company performance, corporate governance, and environmental, social, and human capital management matters.

 

  Shareholders were interested in the culture of our Board and how directors influence management’s execution of our company’s values and risk management practices.

 

 

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   Shareholder engagement   

 

 

Demonstrated track record of responsiveness to investors and other stakeholders

Our Board evaluates and reviews input from our shareholders in considering their independent oversight of management and our long-term strategy. As part of our commitment to constructive engagement with investors, we evaluate and respond to the views voiced by our shareholders, including vote results at our annual meetings of shareholders. Our dialogue has led to enhancements in our corporate governance, ESG, and executive compensation practices, which our Board believes are in the best interest of our company and our shareholders. For example, after considering input from shareholders and other stakeholders, our company:

 

   

Continued to refine our shareholder engagement process to connect shareholders and key stakeholders with our Lead Independent Director, Chairman, other independent directors, and executive management

 

 

   

Provided more clarity and transparency to investors and stakeholders of Board committee-level oversight of human capital management, ESG, and sustainability matters by changing the names of the Board’s Compensation and Human Capital Committee and Corporate Governance, ESG, and Sustainability Committee in early 2020

 

 

   

Enhanced our ESG disclosure, including in our 2019 and 2020 proxy statements (see page 32), continuing to add information to our 2018 and 2019 annual reports discussing Responsible Growth, our work to drive Responsible Growth daily in our business, and highlighting certain of our ESG accomplishments

 

 

   

Continued our active participation in the Sustainability Accounting Standards Board (SASB) and our work with the Task Force on Climate-related Financial Disclosure (TCFD), including through the service of our Chief Accounting Officer on the SASB Foundation Board of Directors

 

 

   

We plan to publish our TCFD Report in 2020 to provide information to our shareholders, clients, and communities regarding the potential financial risks of climate change to our business and how we are managing those risks

 

 

   

Published our 2019 Human Capital Management Report, which provides updated information regarding our commitment to being a great place to work, including being an inclusive workplace worldwide, which is core to Responsible Growth (see page 35)

 

 

   

Expanded the disclosure of our focus on workplace diversity and equal pay for equal work (see page 36)

 

 

   

Continued to actively consider board succession planning and refreshment, holding robust discussions during our Corporate Governance, ESG, and Sustainability Committee meetings, and adding another female director to our Board in July 2019 (see “Identifying and evaluating director candidates” on page 3)

 

 

   

Updated our corporate governance disclosure regarding our Board and its practices, including regarding our directors’ qualifications and skills, their self-evaluation process, and their oversight of risk

 

 

   

Further expanded our political activities and public policy engagement disclosures in 2019 to include a more detailed discussion of our participation in the public policy engagement process. See the “Political Activities” page of our website at http://investor.bankofamerica.com

 

 

Also see “Shareholder engagement & ‘Say on Pay’ results” on page 47 for a discussion of our compensation-related shareholder engagement and our historical “Say on Pay” vote results.

 

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   Responsible growth   

 

 

RESPONSIBLE GROWTH(1)

At Bank of America, we are driving Responsible Growth with a strong focus on ESG leadership. This enables us to serve clients, deliver long-term value through sustainable results to our shareholders, and address some of society’s greatest challenges. Our focus on ESG enables us to drive opportunities and manage risks across our company, helps us define how we mobilize our capital and resources, and informs our business practices and how and when we use our voice in support of our values. Through our commitment to ESG principles, we build trust and credibility as a company people want to work for, invest in, and do business with.

Our management-level Global ESG Committee, which is led by our Vice Chairman Anne Finucane, is comprised of senior executives from across the company who are actively engaged in managing our ESG approach and strengthening our governance. The committee engages in dialogue and debate on social and environmental issues that are material to the business, including our human capital management practices, product and service offerings, business investments, and client selection with the goal of creating a sustainable economy. The committee, which is accountable to our CEO, convenes six times a year and reports regularly to the Corporate Governance, ESG, and Sustainability Committee.

As part of these efforts, we recently established a Sustainable Markets Committee, co-chaired by Vice Chairman Anne Finucane and Chief Operating Officer Tom Montag, to accelerate our progress, identify new opportunities, and build upon our work in sustainable finance including helping accelerate the transition to a low-carbon economy. Through the Sustainable Markets Committee, we are driving consistent perspective and focus on all we are doing in sustainable finance, from policy and research to the deployment of capital and development of investment products across all our business and client bases.

We engage with shareholders, consumer advocates, community advisors, and other stakeholders for their advice and guidance in shaping our policies and practices. In 2005, we founded our National Community Advisory Council, a forum made up of senior leaders from social justice, consumer advocacy, community development, environmental, research, and other advocacy organizations who solicit external perspectives, guidance and feedback on our business policies, practices, and products. This is just one of the many ways we engage globally and take into account a wide range of perspectives as we make decisions as a company.

Doing good and doing well

Our company is proud to endorse the Business Roundtable’s Statement on the Purpose of a Corporation (the “BRT Statement”), and our CEO’s decision to sign the BRT Statement. Although the BRT Statement was issued in 2019, our business practices and strategy have long been aligned with furthering the ideals in the BRT Statement, which we believe is consistent with our commitment to delivering long-term value for our shareholders and other stakeholders through Responsible Growth. Below illustrates how Responsible Growth aligns with each pillar of the BRT Statement:

 

       

Delivering value to our
customers

 

Investing in our

employees

 

Dealing fairly and

ethically with our

suppliers

 

Supporting the
communities in which

we work

 

Generating long-term

value for shareholders

       

What would you like the power to do? At Bank of America, we ask this question every day of all those we serve. It is at the core of how we live our values, deliver our purpose and achieve Responsible Growth. Our purpose is to help make financial lives better, through the power of every connection.

 

Central to our commitment to drive Responsible Growth is that it must be sustainable. A key element of sustainability is being a great place to work for our employees. See page 35 for more information on our human capital management practices.

 

Through our Supplier Diversity & Responsible Sourcing Program, we support economic growth and development for the communities that we serve by ensuring the inclusion of diverse and U.S. small businesses in our outsourcing decisions.

 

Responsible Growth includes sharing success with the communities in which we operate, and a focus on ESG leadership. See page 33 for more information on how we use our ESG leadership to support our communities.

 

Our shareholders provide the capital that allows us to invest, grow, and innovate. In return, we are committed to Responsible Growth and delivering long-term value to our shareholders. See our 2019 Annual Report and page ii for more information on our company’s 2019 performance.

 

 

(1)

Company goals are aspirational and not guarantees or promises that all goals will be met. Statistics and metrics included in this “Responsible Growth” section are estimates and may be based on assumptions or developing standards. Content available at websites and in documents referenced in this section are not incorporated herein and are not part of this proxy statement.

 

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   Responsible growth   

 

 

Making a global impact

As a global financial institution, we recognize that one of the most critical roles we can play is accelerating the deployment of capital to address the 17 United Nations Sustainable Development Goals (SDGs), which are directed toward building a sustainable, prosperous future for all of us. There is a significant gap between the amount of capital needed to address these global challenges and the amount that is being mobilized today. As the public sector and nonprofits cannot fill this gap alone, private sector engagement is critical. Our enterprise-wide focus on sustainable finance taps the power and scale of the capital markets to deliver on both profitability and progress. It is designed to unlock the necessary financing to address these major global and local challenges such as affordable housing, sustainable energy, clean water and sanitation, education, and health care. We deploy more than $50 billion in capital annually to address these issues. Through the combined resources and expertise of the global financial community, government, and nonprofit organizations, we can address problems through business decisions that improve our communities, generate growth, and lead to a return on investments.

Our 2019 sustainable finance and ESG highlights

Highlights of our sustainable finance work in 2019 include:

 

 

Environmental Business Commitment: Our Environmental Business Initiative will direct an additional $300 billion to low-carbon, sustainable business activities over the next ten years. Since 2007 when it was launched, we have already deployed $158 billion to these efforts across the globe.

 

 

Tax equity for renewables: We have been the top tax equity investor in the U.S. since 2015. Our portfolio at the end of 2019 was approximately $9.4 billion of tax equity renewable energy investment.

 

 

Green bonds: We have been a leader in green bond underwriting globally since 2007. BofA Securities has underwritten more than $49 billion on behalf of more than 100 clients, supporting more than 288 deals, and providing critical funding to environmental projects, since 2007. We are the first U.S. financial institution to issue five corporate green bonds. These five corporate green bonds raised a total of $6.35 billion since 2013 for renewable energy projects.

 

 

Community Development Financial Institutions (CDFIs): We originated more than $325 million in loans as part of our more than $1.5 billion investment in 255 CDFIs, also known as local loan centers. This extends our ability to lend to communities throughout the U.S. to finance affordable housing, economic development projects, small businesses, health care centers, charter schools, and other community facilities and services.

 

 

Tory Burch Foundation Capital Program: In 2019, we doubled our investment in the Tory Burch Foundation Capital Program, committing $100 million in capital to connect women small business owners to affordable loans. Since it launched five years ago, more than 3,200 women entrepreneurs have received $54 million in loans through CDFIs to help them grow and refine their businesses.

 

 

Blended Finance Catalyst Pool: In 2018, we launched our Blended Finance Catalyst Pool to mobilize additional private capital to help address the United Nations SDGs. This financing initiative provides $60 million of capital for Affordable and Clean Energy (SDG7), Sustainable Cities and Communities (SDG11), Clean Water and Sanitation (SDG6), and Climate Action (SDG13), among others.

 

 

Affordable homeownership: In April 2019, we announced a new $5 billion Community Homeownership Commitment to benefit low- and moderate- income (LMI) homebuyers and communities across the country over the next five years.

 

 

Community Development Banking: We provided a record $4.9 billion in loans, tax credit equity investments and other real estate development solutions, and deployed $3.1 billion in debt commitments and $1.8 billion in investments to help build strong, sustainable communities by financing affordable housing, charter schools, and economic development across the country. Between 2005 and 2019, we financed more than 202,800 affordable housing units.

 

 

ESG client balances: As of December 31, 2019, we had $25.1 billion in assets in our wealth management business with a clearly defined ESG investment approach.

 

 

Philanthropy: In 2019, we delivered approximately $250 million in philanthropic investments to drive economic mobility and social progress in the communities we serve from the Bank of America Charitable Foundation.

 

 

Climate risk and ESG disclosure: We demonstrated our commitment to transparency and disclosure through our extensive Global Reporting Initiative (GRI) reporting, incorporation of ESG data in our 2019 Annual Report to shareholders, and our ongoing engagement with ESG reporting frameworks and analyst agencies. This year, we plan to issue our first reports under the SASB and TCFD frameworks.

 

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   Responsible growth   

 

 

Other ESG highlights include:

 

 

Carbon neutrality: We achieved carbon neutrality, pending third party validation, by reducing Scope 1 and 2 emissions from our facilities, purchasing 100% renewable electricity, and buying carbon credits for our remaining unavoidable emissions.

 

 

Pathways: In June 2018, we committed to hiring 10,000 individuals from low- and moderate-income neighborhoods in our Consumer and Small Business division, through our Pathways program, over the next five years. To date, we have hired more than 8,000 employees from these communities, putting us at over 80 percent of our goal in just two years.

 

 

Military hiring goal: We have surpassed our five-year goal to hire 10,000 veterans, National Guard, and reservists.

 

 

Employee giving and volunteering: In 2019, employees volunteered 2 million hours, and directed $77 million to communities through individual giving and our company’s matching gifts program.

 

 

Neighborhood Builders and Champions: For more than 15 years through our Neighborhood Builders program, we’ve partnered with more than 1,000 local nonprofits advancing economic mobility and social progress in the communities we serve. As part of this investment, we’ve invested $240 million and helped more than 2,000 nonprofit executives strengthen their leadership skills. In addition, we’ve introduced Neighborhood Champions, a program which supports the role of strong nonprofit leaders to advance economic mobility in more than 40 smaller communities.

 

 

Bank of America Institute for Women’s Entrepreneurship at Cornell: After launching the Bank of America Institute for Women’s Entrepreneurship at Cornell in 2018, we recently announced that we are doubling our commitment and will provide access for 20,000 women entrepreneurs to participate in the only online Ivy League certification program for women business owners in the world. Representing over 65 countries including Bangladesh, Egypt, Ghana, Uruguay, and the United States, more than 15,700 women are currently enrolled.

 

 

Global Ambassadors Program: Our longstanding partnership with Vital Voices, The Global Ambassadors Program, brings women from around the world together for a week of training, mentorship, and networking. Through our 20 programs, we have provided over 3,700 hours of training and 3,400 hours of mentoring to women representing 73 countries. In 2019, we held programs in Puerto Rico and Paris, France.

 

 

Bank of America Art Conservation Project: Since 2010 the Bank of America Art Conservation Project has provided grants to fund 170 conservation projects in 33 countries to conserve paintings, sculptures, and art and cultural treasures that are important to the preservation of cultural heritage. We are a leader in helping the arts flourish across the globe, supporting more than 2,000 nonprofit cultural institutions each year.

 

 

Youth employment: In 2019, we supported more than 3,000 summer jobs for young adults through our Financial Center internship program, partnerships with U.S. mayors’ summer jobs programs for at-risk teens, and our own Student Leaders® program which connects high school students to nonprofit internships and leadership skills.

 

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   Responsible growth   

 

 

Being a great place to work

Central to our commitment to drive Responsible Growth is that it must be sustainable. A key element of sustainability is being a great place to work for our employees. Our shareholders have informed us of the importance they place on transparency and understanding our employee practices, and we are pleased to provide examples of the many things we do to support our employees and their families, as well as some additional steps we are taking to continue to build on this progress. In November 2019, we published our 2019 Human Capital Management Report, Being a Great Place to Work, which highlights our work and progress, available at https://about.bankofamerica.com/annualmeeting.

Setting the tone at the top with our Board

Our commitment to diversity starts at the top with our Board. Our Board oversees our culture and holds management accountable in fulfilling our commitment to Responsible Growth, including being a great place to work and a diverse and inclusive environment. Our Board and its committees, among other things:

 

 

Oversee our human capital management strategies, programs, and practices, including the progress on our diversity and inclusion (D&I) goals

 

 

Oversee our establishment, maintenance, and administration of appropriately designed compensation programs and plans

 

 

Review our annual Employee Engagement Survey results, including our Engagement and D&I indices

 

 

 

LOGO

 

Being a diverse and inclusive workplace for our employees around the world

Our employees reflect the diversity of our external stakeholders. At all levels of the company, we focus on attracting, retaining and developing our diverse talent. We strive to mirror the customers, clients, and communities we serve.

 

         

Global Diversity &
inclusion Council
(GDIC)

 

Goal setting/
accountability

  Chief Diversity &
Inclusion Officer
  Management levels   Campus hires   Managers
           
The GDIC, which has been chaired by our CEO and Chairman since 2007, promotes diversity goal setting, which is embedded in our performance management process and occurs at all levels of the organization.  

The CEO and the management team set the D&I goals of the company. Each management team member has action-oriented diversity targets, which are subject to our quarterly business review process, used as part of talent planning, and included in Board- reviewed scorecards.

 

  We have a senior Human Resources executive who partners with the CEO and management team to drive our D&I strategy, programs, initiatives, and policies.   We have built robust analytics and put processes in place at all levels of the company to drive progress and accountability. We measure diversity progress across our top three management levels, comprised of approximately 1,200 people in senior roles.   We are focused on building a strong, diverse talent pipeline of future leaders. Through recruitment and professional development efforts and partnerships, we are attracting and working to retain some of the best and most diverse talent from around the world.   We hold our more than 20,000 managers accountable for driving progress in diversity within their teams. We also provide opportunities for managers to sponsor and support rising talent to continue building our diverse workforce.

 

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   Responsible growth   

 

 

Global workforce

We believe that achieving strong operating results-the right way-starts with our employees. Our diversity makes us stronger, and the value we deliver as a company is strengthened when we bring broad perspectives together to meet the needs of our diverse stakeholders.

 

 

LOGO

 

Recognizing and rewarding performance

 

We pay our employees fairly based on market rates for their roles, experience, and how they perform, and we regularly benchmark against other companies both within and outside our industry to help ensure our pay is competitive.

 

We are an industry leader in establishing an internal minimum rate of pay above all mandated minimums for our U.S. hourly employees, and have made regular increases over the past several years. Our minimum hourly wage for U.S. employees is $17. We will raise it to $20 by the end of the first quarter of 2020.

   Competitive compensation   Sharing our success
   LOGO   LOGO

Equal pay for equal work

Our company compensates our employees fairly and equitably, with equal pay for equal work, regardless of race or gender. We maintain robust policies and practices that reinforce equal pay for equal work, including reviews with oversight from our Board and senior leaders. For over a decade, we have conducted rigorous processes and analyses with outside experts to examine individual employee pay before year-end compensation decisions are finalized, and we adjust compensation where appropriate.

We also have a standard U.S. practice that restricts the solicitation of compensation information from candidates during our hiring process. This helps ensure that we consider new hires for their individual qualifications and roles, rather than how they may have been previously compensated.

We believe our pay-for-performance approach—combined with our focus on workforce representation—will continue driving the advancement and representation of women and people of color in our company.

In 2019, we continued to enhance our efforts to compensate our employees fairly and equitably. We expanded our review from our regional leadership hubs (U.S., U.K., France, Ireland, Hong Kong, and Singapore) to include India. Results of this equal pay for equal work review showed:

 

 

 

LOGO

 

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   Responsible growth   

 

 

Creating opportunities for employees to grow and develop

A key aspect of Responsible Growth is attracting and retaining exceptional talent from around the world to Bank of America. This starts with how we recruit new employees and extends to the many ways we support their professional development and career growth.

  Development opportunities. We recognize how important it is for employees to develop and progress in their careers. That’s why we provide a variety of resources to help employees grow in their current roles and build new skills—including learning tools, leadership development programs, and pathways to new opportunities and reskilling.

  Promoting inclusion. We promote an inclusive workplace through learning opportunities, including: courageous conversations on D&I, social justice, mental health, race, gender, and equality; the inclusion series for managers to equip them with knowledge and the tools to better mitigate bias and drive inclusion deep within their teams, and the myD&I Development Program.

  Accountability. We hold ourselves accountable to our diversity commitment through our leadership councils, employee networks, and external partnerships.

  Listening to our employees. We have conducted an annual Employee Engagement Survey for nearly two decades. The results of the survey and the process of continuous improvement that ensues is discussed with the Board at least annually.

 

 

 

 

 

Helped more than

21K

employees find roles at

our company

 

 

 

 

Supported

the career development of more than

66K

Consumer and Small Business employees through The Academy, our award-winning,

high-tech curriculum

 

 

 

We continue to drive progress in the diversity of our future leaders, as seen through our campus hires:

 

LOGO

 

   

 

 

   LOGO

 

Employee Engagement Survey and turnover results

 

In 2019, our commitment to Responsible Growth and our efforts to make our company a great place to work resulted in a record high employee engagement score and historically low turnover across the company.

 

 

 

 

LOGO

 

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   Responsible growth   

 

 

Supporting employees’ physical, emotional and financial wellness

We are committed to supporting our employees’ and their families’ wellbeing by offering flexible, competitive benefits, and through major life events.

 

 

Physical wellness. Our approach to physical wellness is built on the things we can do to help address health risks and manage health care costs for our employees, including robust health and insurance benefits and wellness resources. Between current U.S.–based employees and their families and retirees, we are responsible for providing comprehensive health and wellness benefits to nearly 400,000 people.

 

 

Emotional wellness. Through a range of innovative, industry-leading, and flexible programs and benefits, we support our employees through everyday challenges, special moments, and critical life events.

 

 

Financial wellness. The business case for financial wellness is clear—if employees are not financially well, there is a greater chance that they may not be physically or emotionally well. That’s why we offer robust financial benefits focused on driving better behaviors across life priorities and the financial spectrum.

 

 

Supporting our employees. Life Event Services (LES) is an internal, highly specialized group providing personalized support for major life events, including connecting employees to resources, benefits, counseling, and other support. More than 100,000 employees have worked with the highly trained and empathetic LES team members.

 

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   Responsible growth   

 

 

Recognition for our Responsible Growth

We are honored to be recognized by organizations and media around the world for our ESG commitments and initiatives and for our efforts to be a great place to work.

In 2019, we were recognized by Fortune as one of their 100 Best Companies to Work For, Catalyst for investing in women, Euromoney as the Best Bank for Diversity and Inclusion and LinkedIn as a top company in the U.S., among several others. Below are some of our most recent awards.

 

Fortune

100 Best Companies to Work For (2019)

 

Best Big Companies to Work For (2019)

only financial services company recognized

 

Best Workplaces for Women (2019)

 

Best Workplaces in Financial Services & Insurance (2019)

 

Best Workplaces for Diversity (2019)

Best Workplaces for Parents (2019)

Best Workplaces for Giving Back (2018)

 

Change the World (2019)

named the top global bank

Euromoney

World’s Best Bank for Diversity and Inclusion (2019)

 

World’s Best Bank (2018)

 

World’s Best Bank for Corporate Social Responsibility (2017)

 

Asia’s Best Bank for Corporate Social Responsibility (2019)

LinkedIn

50 Top Companies in the U.S. (2019)

top ranking financial institution

Working Mother

100 Best Companies (31 consecutive years)

Best Companies for Multicultural Women (2019)

Best Companies for Dads (2019)

Barron’s

100 Most Sustainable Companies (2020)

U.S. Environmental Protection Agency

EPA Green Power Leadership Award for Excellence in Green Power (2019)

The Banker

Most Innovative Investment Bank of the Year for Corporate Social Responsibility (2019)

Climate Leadership Awards

Innovative Partnership Certificate (2019)

Investing in Women Initiative

Catalyst Award Winner (2019)

Forbes

World’s Best Employers (2019)

Bloomberg

Sector-Neutral Gender-Equality Index (2019)

Financial Services Gender-Equality Index (2017)

RateMyPlacement

100 Undergraduate Employers

(2019-2020)

PEOPLE Magazine

Companies that Care (2019)

AnitaB.org

Top Companies for Women Technologists (2019)

Diversity MBA Magazine

50 Out Front: Best Places for Women & Diverse Managers to Work (2019)

JUST Capital

America’s Most JUST Companies (2019)

Military Times

Best for Vets: Employers (2019)

Stonewall

UK Workplace Equality Index (2019)

Fatherly

50 Best Places to Work for New Dads (2018)

American Council on Renewable Energy (ACORE)

Renewable Energy Leadership Award (2019)

Dow Jones Sustainability Index

World Index (top 10% of banks) (2019)

North America Index (top 20% of banks)

(2019)

Equileap

U.S. and Global Gender Equality Reports (2019) named the leading company in U.S. for gender equality

Black Enterprise

50 Best Companies for Diversity (2018)

Dave Thomas Foundation for Adoption

100 Best Adoption-Friendly Workplace (2019)

Disability:IN

Global Employer of the Year (2019)

National Association of Asian American Professionals

Milestone Honor Award (Asian Leadership Network, 2016)

Global Finance Magazine

Best Bank in the World (2019)

LATINA Style

Top 50 Best Companies for Latinas to Work for in the U.S. (20 consecutive years)

Top 12 Companies of the Year (2019)

Top 12 Employee Resource Groups of the Year (Hispanic-Latino Organization for Leadership & Advancement, 2019)

National Association for Female Executives (NAFE)

Top Companies for Executive Women (12 years)

PR News

CSR Award for Employee Relations (2019)

CDP

A list named for the ninth year (2019)

Supplier Engagement Leaderboard (2019)

Center for Political Accountability

Trendsetter on CPA-Zicklin Index of Corporate Political Disclosure and Accountability (2016-2019)

 

 

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   Related person and certain other transactions   

 

 

RELATED PERSON AND CERTAIN OTHER TRANSACTIONS

Our related person transactions policy in our Corporate Governance Guidelines sets forth our policies and procedures for reviewing and approving or ratifying any transaction with related persons (directors, director nominees, executive officers, shareholders holding 5% or more of our voting securities, or any of their immediate family members or affiliated entities). Our policy covers any transactions where the aggregate amount involved will or may be expected to exceed $120,000 in any fiscal year, our company is a participant, and a related person has or will have a direct or indirect material interest.

Under our related person transactions policy, our Corporate Governance, ESG, and Sustainability Committee must approve or ratify any related person transactions, and when doing so, consider: the related person’s interest in the transaction; whether the transaction involves arm’s-length bids or market prices and terms; the transaction’s materiality to each party; the availability of the product or services through other sources; the implications of our Code of Conduct or reputational risk; whether the transaction would impair a director’s or executive officer’s judgment to act in our company’s best interest; the transaction’s acceptability to our regulators; and in the case of an independent director, whether the transaction would impair his or her independence or status as an “outside” or “non-employee” director.

Our Board has determined that certain types of transactions do not create or involve a direct or indirect material interest on the part of the related person and therefore do not require review or approval under the policy. These include transactions involving financial services, including: loans and brokerage; banking, insurance, investment advisory, or asset management services; and other financial services we provide to any related person, if the services are provided in the ordinary course of business, on substantially the same terms as those prevailing at the time for comparable services provided to non-affiliates, and comply with applicable law, including the Sarbanes-Oxley Act of 2002 and Federal Reserve Board Regulation O.

A number of our directors, director nominees, and executive officers, their family members, and certain business organizations associated with them are or have been customers of our banking subsidiaries. All extensions of credit to these persons have been made in the ordinary course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time in comparable transactions with persons not related to our company and did not involve more than the normal risk of collectability.

Occasionally, we may have employees who are related to our executive officers, directors, or director nominees. We compensate these individuals in a manner consistent with our practices that apply to all employees. The sister of Mr. Thong M. Nguyen, an executive officer, and the brother of Dr. Zuber, a director and nominee, are each employed by the company in non-executive, non-strategic positions, and each received compensation in 2019 of approximately $180,000 and $330,000, respectively. Dr. Zuber’s brother’s compensation is primarily commissions based. The methodology through which his compensation is calculated is consistent with that used for other financial advisors in similar roles. The compensation and other terms of employment of both Mr. Nguyen’s sister and Dr. Zuber’s brother are determined on a basis consistent with the company’s human resources policies.

Our company and Mr. Moynihan are parties to an aircraft time-sharing agreement, as disclosed in prior proxy statements and approved by our Corporate Governance, ESG, and Sustainability Committee in December 2010. In addition, the company and each of our executive officers have entered into nonexclusive aircraft time-sharing agreements. These agreements provide a means under Federal Aviation Administration regulations for our executive officers to reimburse the company for incremental costs of permitted personal travel on our company’s aircraft. To the extent such aircraft usage exceeds the dollar threshold in our related person transactions policy, it will be reviewed for approval or ratification by our Corporate Governance, ESG, and Sustainability Committee.

Based on information contained in separate Schedule 13G filings with the SEC, each of Warren E. Buffett/Berkshire Hathaway Inc. (Berkshire Hathaway), BlackRock, Inc. (BlackRock), and The Vanguard Group (Vanguard) reported that it beneficially owned more than 5% of the outstanding shares of our common stock as of December 31, 2019 (see “Stock ownership of directors, executive officers, and certain beneficial owners” on the next page). In the ordinary course of our business during 2019, our subsidiaries provided and are expected to continue to provide financial advisory, sales and trading, treasury, and other financial or administrative services to Berkshire Hathaway, BlackRock, and Vanguard and their subsidiaries. These transactions were entered into on an arm’s-length basis and contain customary terms and conditions. Our company and its subsidiaries may also, in the ordinary course, invest in BlackRock or Vanguard funds or other products or buy or sell assets to or from BlackRock or Vanguard funds and separate accounts.

 

40      BANK OF AMERICA


Table of Contents

   Stock ownership of directors, executive officers, and certain beneficial owners   

 

 

STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS, AND CERTAIN BENEFICIAL OWNERS

Our voting securities are our common stock, Series B Preferred Stock, and Series 1, 2, 4, and 5 Preferred Stock. The following table shows the number of shares of our common stock beneficially owned as of March 2, 2020 by: (i) each director; (ii) each named executive officer; (iii) all directors and executive officers as a group; and (iv) beneficial owners of more than 5% of any class of our voting securities (as determined under SEC rules). As of that date, none of our directors and executive officers owned any shares of any class of our voting securities, other than as reported in the table below, or had any outstanding options or warrants for such shares. Each director, each named executive officer, and all directors and executive officers as a group beneficially owned less than 1% of our outstanding common stock. Unless otherwise noted, all shares of our common stock are subject to the sole voting and investment power of the directors and executive officers. The table below also contains information about other stock units that are not deemed beneficially owned under SEC rules.

 

 

 

 

Other stock units

 

Name

 

  Common stock  
beneficially
owned

 

Deferred director
stock awards
(1)

 

Unvested restricted
stock units
(2)

 

    Total    

 

Directors

Sharon L. Allen(3)

88,460         

 

 

88,460   

Susan S. Bies

169,158         

 

 

169,158   

Jack O. Bovender, Jr.

123,415         

 

 

123,415   

Frank P. Bramble, Sr.(4)

93,417         

 

159,738

 

253,155   

Pierre J.P. de Weck

60,263         

 

 

60,263   

Arnold W. Donald

77,237         

 

6,450

 

83,687   

Linda P. Hudson

19,507         

 

64,894

 

84,401   

Monica C. Lozano

3,000         

 

160,349

 

163,349   

Thomas J. May(5)

2,142         

 

306,751

 

308,893   

Lionel L. Nowell III

3,930         

 

103,206

 

107,136   

Denise L. Ramos

—         

 

8,693

 

8,693   

Clayton S. Rose(6)

25,515         

 

13,359

 

38,874   

Michael D. White(7)

85,650         

 

38,682

 

124,332   

Thomas D. Woods(8)

71,037         

 

 

71,037   

R. David Yost

64,153         

 

115,868

 

180,021   

Maria T. Zuber

19,138         

 

 

19,138   

Named Executive Officers

Brian T. Moynihan(9)

1,792,203         

 

 

1,762,058

3,554,261   

Paul M. Donofrio

734,639         

 

 

596,674

1,331,313   

Dean C. Athanasia(10)

218,377         

 

 

523,128

741,505   

Geoffrey S. Greener

868,253         

 

 

585,486

1,453,739   

Thomas K. Montag(11)

3,122,775         

 

 

954,766

4,077,541   

All directors and executive officers as a group (28 persons)(12)

9,779,328         

 

977,990

 

6,850,419

 17,607,737   

 

Name

 

 

   Common stock   
beneficially
owned

 

   Percent of   
class

 

Certain Beneficial Owners

Warren E. Buffett/Berkshire Hathaway Inc.(13)

 

947,760,000

 

10.9

%

The Vanguard Group(14)

 

620,154,081

 

7.1

%

BlackRock, Inc.(15)

 

541,084,135

 

6.2

%

 

(1)

For non-management directors, includes stock units credited to their accounts pursuant to deferrals made under the terms of the Director Deferral Plan. These stock units do not have voting rights and are not considered beneficially owned under SEC rules. Each unit has a value equal to the fair market value of a share of our common stock. These units, which are held in individual accounts in each director’s name, will be paid in cash upon the director’s retirement if vested at that time.

 

2020 PROXY STATEMENT      41


Table of Contents

   Stock ownership of directors, executive officers, and certain beneficial owners   

 

 

(2)

Includes the following stock units, which are not treated as beneficially owned under SEC rules because the holder does not have the right to acquire the underlying stock within 60 days of March 2, 2020 and/or the stock units will be paid in cash and therefore do not represent the right to acquire stock:

 

Name

 

 

   Time-based RSUs   
(TRSUs)

 

 

   Cash-settled RSUs   

(CRSUs)

 

 

   Performance RSUs   

(PRSUs)

 

 

   Total stock   
units

 

Brian T. Moynihan

 

307,583

 

217,581

 

1,236,894

 

1,762,058

Paul M. Donofrio

 

223,645

 

 

373,029

 

596,674

Dean C. Athanasia

 

204,272

 

 

318,856

 

523,128

Geoffrey S. Greener

 

222,038

 

 

363,448

 

585,486

Thomas K. Montag

 

359,097

 

 

595,669

 

954,766

All executive officers as a group

 

2,560,388

 

217,581

 

4,072,450

 

6,850,419

 

    

Each stock unit has a value equal to the fair market value of a share of our common stock, but does not confer voting rights. TRSUs include the right to receive dividend equivalents and will be paid in shares of our common stock or cash at vesting or, in certain circumstances, after termination of employment. CRSUs do not include the right to receive dividend equivalents and will be paid in cash. PRSUs include the right to receive dividend equivalents and vest subject to attaining pre-established performance goals. To the extent earned, PRSUs granted in February 2016, February 2018, February 2019 and February 2020 will be settled 100% in shares of our common stock. For unearned PRSUs, the stock units shown include the number of PRSUs granted assuming 100% of the award will be earned; however, the actual number of stock units earned may vary depending upon achieving performance goals. Because they are economically comparable to owning shares of our common stock, certain of these stock units currently qualify for purposes of compliance with our stock ownership and retention requirements, except for PRSUs, which qualify only when earned.

 

(3)

Includes 1,000 shares of our common stock for which Ms. Allen shares voting and investment power with her spouse.

 

(4)

Includes 50,000 shares of our common stock for which Mr. Bramble shares voting and investment power with his spouse.

 

(5)

Includes 24,527 stock units held by Mr. May under the FleetBoston Director Stock Unit Plan, 3,406 stock units held under the Bank Boston Director Retirement Benefits Exchange Program, and 5,983 stock units held under the Bank Boston Director Stock Award Plan.

 

(6)

Includes 25,515 shares of our common stock for which Dr. Rose shares voting and investment power with his spouse.

 

(7)

Includes 77,000 shares of our common stock for which Mr. White shares voting and investment power with his spouse.

 

(8)

Includes 50,003 shares of our common stock for which Mr. Woods shares voting and investment power with his spouse.

 

(9)

Includes 58,376 shares of our common stock for which Mr. Moynihan shares voting and investment power with his spouse.

 

(10)

Includes 218,377 shares of our common stock for which Mr. Athanasia shares voting and investment power with his spouse.

 

(11)

Includes 812,061 shares of our common stock held by Mr. Montag in a family trust for which Mr. Montag shares investment power with his spouse, who is trustee.

 

(12)

Such persons have sole voting and investment power over 8,972,821 shares of our common stock and shared voting or investment power or both over 1,784,497 shares of our common stock.

 

(13)

Consists of common stock held indirectly by Warren E. Buffett, 3555 Farnam Street, Omaha, NE 68131 and Berkshire Hathaway Inc., 3555 Farnam Street, Omaha, NE 68131. According to a Schedule 13G/A filed with the SEC on February 14, 2020, Mr. Buffett and Berkshire Hathaway Inc. had shared voting and investment power with respect to all 947,760,000 shares. Information about other entities deemed to share beneficial ownership of the shares, including their voting and investment power, is disclosed in the Schedule 13G/A.

 

(14)

Consists of common stock held by The Vanguard Group, 100 Vanguard Blvd., Malvern, PA 19355. According to a Schedule 13G/A filed with the SEC on February 12, 2020, The Vanguard Group had sole voting power with respect to 12,287,374 shares, sole investment power with respect to 606,243,657 shares, shared voting power with respect to 2,427,442 shares, and shared investment power with respect to 13,910,424 shares.

 

(15)

Consists of common stock held by BlackRock, Inc., 55 East 52nd Street, New York, NY 10055. According to a Schedule 13G/A filed with the SEC on February 10, 2020, BlackRock, Inc. had sole voting power with respect to 466,268,947 shares and sole investment power with respect to 541,084,135 shares.

 

42      BANK OF AMERICA


Table of Contents

   Director compensation   

 

 

DIRECTOR COMPENSATION

Our director compensation philosophy is to appropriately compensate our non-management directors for the time, expertise, and effort required to serve as a director of a large, complex, and highly regulated global company, and to align the interests of directors and long-term shareholders.

Annual payments are made after the non-management directors are elected by shareholders. Non-management directors who begin their Board or committee chair service other than at the annual meeting of shareholders receive a prorated amount of annual compensation. Mr. Moynihan receives no compensation for his services as our sole management director.

2019 Director pay components

The primary elements of annual compensation and incremental awards for our non-management directors for 2019 are provided in the table below. Incremental awards recognize additional responsibilities and the time commitment of these critical Board leadership roles.

 

Annual award components

 

 

 

Incremental awards for board leadership

Non-

management

directors

($)

 

Lead

Independent
Director

($)

 

Audit &

Enterprise Risk

Committee chairs

($)

 

Compensation and
Human Capital &
  Corporate Governance,  
ESG, and Sustainability
Committee chairs

($)

 

Cash Award

 

100,000

 

50,000

 

40,000

30,000

Restricted Stock Award

 

250,000

 

100,000

 

N/A

     N/A

The annual restricted stock award in 2019 was made pursuant to the Bank of America Key Employee Equity Plan (KEEP). The number of restricted shares awarded is equal to the dollar value of the award divided by the closing price of our common stock on the NYSE on the grant date, rounded down to the next whole share, with cash paid for any fractional share. Dividends are paid on the award when they are paid on shares of our common stock. The annual restricted stock award is subject to a one-year vesting requirement. If a director retires before the one-year vesting date, a prorated amount of the award vests based on the number of days the director served during the vesting period before retirement. Any unvested amount of the award is forfeited.

2019 Director compensation review

Our Compensation and Human Capital Committee annually reviews and periodically recommends updates to the director compensation program to our Board for approval. The Committee’s recommendation takes into account our director compensation philosophy, changes in market practices, and consultation with the Committee’s independent compensation consultant, Farient Advisors. No changes were made to the form or amount of director compensation as part of the 2019 review.

Director deferral plan

Non-management directors may elect to defer all or a portion of their annual restricted stock or cash awards through the Bank of America Corporation Director Deferral Plan (Director Deferral Plan). When directors elect to defer their restricted stock award, their “stock account” is credited with “stock units” equal in value to the restricted stock award and subject to the same vesting requirement applicable to restricted stock awards to directors. Each stock unit is equal in value to a share of our common stock but because it is not an actual share of our common stock, it does not have any voting rights. When directors elect to defer their cash award, they may choose to defer into either a stock account or a “cash account.” Deferrals into a stock account are credited with dividend equivalents in the form of additional stock units and deferrals into the cash account are credited with interest at a long-term bond rate. Following retirement from our Board and depending on the director’s selection, a non-management director may receive the stock account balance (to the extent vested) and cash account balance in a single lump sum cash payment or in a series of cash installment payments.

Stock retention requirements and hedging prohibition for non-management directors

 

 

Under our stock retention requirements, non-management directors are required to hold and cannot sell the restricted stock they receive as compensation (except as necessary to pay taxes on taxable events such as vesting) until termination of their service. All non-management directors are in compliance with these requirements.

 

2020 PROXY STATEMENT      43


Table of Contents

   Director compensation   

 

 

 

Our Code of Conduct prohibits our directors from hedging and speculative trading of company securities.

 

 

See “Hedging policy” on page 28 for additional information about our hedging prohibition rules.

2019 Director compensation

The following table shows the compensation paid to our non-management directors for their services in 2019:

 

Director

 

 

Fees earned or 

paid in cash

($)(1)

 

 

Stock

awards

($)(2)

 

 

All other
compensation
($)
(3)

 

Total

($)

 

Sharon L. Allen

140,000

250,000

 

  10,000

400,000

Susan S. Bies

100,000

250,000

 

141,528

491,528

Jack O. Bovender, Jr.

150,000

350,000

 

    3,000

503,000

Frank P. Bramble, Sr.

140,000

250,000

 

390,000

Pierre J.P. de Weck

100,000

250,000

 

221,979

571,979

Arnold W. Donald

100,000

250,000

 

350,000

Linda P. Hudson

100,000

250,000

 

350,000

Monica C. Lozano

130,000

250,000

 

  17,998

397,998

Thomas J. May

130,000

250,000

 

380,000

Lionel L. Nowell III

100,000

250,000

 

  34,704

384,704

Denise L. Ramos(4)

74,520

186,300

 

  14,363

275,183

Clayton S. Rose

100,000

250,000

 

  18,896

368,896

Michael D. White

100,000

250,000

 

  31,239

381,239

Thomas D. Woods

100,000

250,000

 

  20,310

370,310

R. David Yost

100,000

250,000

 

350,000

Maria T. Zuber

100,000

250,000

 

  15,215

365,215

 

(1)

The amounts in this column represent the annual cash award plus any Lead Independent Director or committee chair cash retainers paid in 2019, including amounts deferred under the Director Deferral Plan. For 2019 cash awards deferred into the stock account under the Director Deferral Plan, our directors were credited with the stock units shown in the table below based on the closing price of our common stock on the date of deferral:

 

Director

 

Stock units 

(#)

 

 

Value of deferred

stock units

($)

 

Thomas J. May

 

4,330.45

 

130,000

Lionel L. Nowell III

 

3,331.11

 

100,000

Denise L. Ramos

 

2,456.16

 

74,520

R. David Yost

 

3,331.11

 

100,000

 

(2)

The amounts in this column represent the aggregate grant date fair value of restricted stock awards granted during 2019, whether or not those awards were deferred under the Director Deferral Plan. The grant date fair value is based on the closing price of our common stock on the NYSE on the grant date. As of December 31, 2019, our non-management directors held the number of unvested shares of restricted stock or, if deferred, unvested stock units shown in the table below:

 

Director

 

 

Unvested shares of

restricted stock
or stock units
(#)

 

Sharon L. Allen

 

8,327

Susan S. Bies

 

8,327

Jack O. Bovender, Jr.

 

11,658

Frank P. Bramble, Sr.

 

8,328

Pierre J. P. de Weck

 

8,327

Arnold W. Donald

 

8,327

Linda P. Hudson

 

8,328

 

44      BANK OF AMERICA


Table of Contents

   Director compensation   

 

 

Director

 

 

 

Unvested shares of  

restricted stock  

or stock units  

(#)  

 

Monica C. Lozano

   

 

8,328  

Thomas J. May

   

 

8,328  

Lionel L. Nowell III

   

 

8,328  

Denise L. Ramos

   

 

6,140  

Clayton S. Rose

   

 

8,328  

Michael D. White

   

 

8,328  

Thomas D. Woods

   

 

4,496  

R. David Yost

   

 

8,328  

Maria T. Zuber

   

 

8,327  

 

(3)

Our directors are eligible to participate in our matching gifts program, under which our charitable foundation matches up to $5,000 in donations made annually by our employees and active directors to approved charitable organizations. Eligibility for matching gifts is based on the year the charitable donation was made by the director although the match may be completed in a subsequent year. This program is also available to all U.S.-based, benefits eligible employees. The values in this column reflect the amounts that were donated to charities in 2019 on behalf of directors under the matching gifts program. The following amounts match director donations made in 2019: Mr. Bovender, $3,000; Mr. de Weck, $4,980; and Mr. Woods, $1,000 and the following amounts match director donations made prior to 2019: Ms. Allen, $10,000; Ms. Lozano, $5,000; Dr. Rose, $5,000; and Mr. White, $5,000.

 

  

This column includes the perquisites received by a director to the extent the total value of such perquisites was equal to or exceeded $10,000, as required under SEC rules.

 

  

Spouses and guests of directors were invited to our company’s annual strategic planning meeting in November 2019 and certain other business events to allow the Board to meet additional members of management for succession planning purposes and to strengthen collegiality among management and directors. This column includes the actual aggregate incremental cost incurred in connection with any director’s spouse or guest ground transportation, commercial air travel, lodging, meal, activities and any other incidental event-related expenses.

 

  

Ms. Bies served as chair of the board of directors of Merrill Lynch International (MLI), a United Kingdom broker-dealer subsidiary of Bank of America until January 1, 2020. For her services as a non-management director of MLI in 2019, Ms. Bies received an annual cash retainer totaling £100,000, which was paid monthly. The retainer paid in 2019 is reported in the table above based on a weighted average exchange rate of approximately 0.79 pounds sterling to one dollar. The exchange rate used for each payment was based on the average exchange rate for the month prior to the month of payment.

 

  

Mr. de Weck is a member of the board of directors of MLI. For his services as a non-management director of MLI and chair of the risk committee, Mr. de Weck received an annual cash retainer totaling £100,000. Mr. de Weck was appointed chair of the board of directors of BofA Securities Europe S.A. (BofASE), a French broker-dealer subsidiary of Bank of America, on January 21, 2019. For his services as chair of the board of directors of BofASE, Mr. de Weck received an annual cash retainer totaling 85,000, which was paid monthly and prorated for his period of service. The retainers paid in 2019 are reported in the table above based on a weighted average exchange rate of approximately 0.79 pounds sterling to one dollar for his MLI service and approximately 0.89 euros to one dollar for his BofASE service. The exchange rate used for each payment was based on the average exchange rate for the month prior to the month of payment.

 

(4)

Ms. Ramos became a director in July 2019. The amount for Ms. Ramos reflects a prorated award for her period of service.

 

2020 PROXY STATEMENT      45


Table of Contents

   Proposal 2: Approving our executive compensation (an advisory, non-binding “Say on Pay” resolution)   

 

 

PROPOSAL 2: APPROVING OUR EXECUTIVE COMPENSATION (AN ADVISORY, NON-BINDING “SAY ON PAY” RESOLUTION)

We are seeking an advisory vote to approve our executive compensation for 2019. At our 2017 annual meeting of shareholders, a majority of shareholders voted to have a “Say on Pay” vote each year. As a result, we will conduct an advisory vote on executive compensation annually at least until the next shareholder advisory vote on the frequency of such votes.

Although the “Say on Pay” vote is advisory and is not binding on our Board, our Compensation and Human Capital Committee will take into consideration the outcome of the vote when making future executive compensation decisions. At the 2019 annual meeting of shareholders, nearly 96% of the votes cast favored our “Say on Pay” proposal. The Committee considered this result and input from investors during our shareholder engagement process, and in light of the strong support, maintained a consistent overall approach for 2019.

Our Board believes that our current executive compensation program appropriately links compensation realized by our executive officers to our performance and properly aligns the interests of our executive officers with those of our shareholders. The details of this compensation for 2019, and the reasons we awarded it, are described in “Compensation discussion and analysis,” starting below.

 

LOGO   

Our Board recommends a vote “for” approving our executive compensation (an advisory, non-binding “Say on Pay” resolution) (Proposal 2).

Our Board recommends that our shareholders vote in favor of the following resolution:

“Resolved, that our shareholders approve, on an advisory basis, the compensation of our company’s named executive officers, as disclosed pursuant to the compensation disclosure rules of the U.S. Securities and Exchange Commission, including the Compensation Discussion and Analysis, the compensation tables, and the accompanying narrative discussion disclosed in this proxy statement.”

COMPENSATION DISCUSSION AND ANALYSIS

 

  1.    Executive summary    47
     a.    Executive compensation philosophy    47
     b.    2019 Executive compensation highlights    47
     c.    Shareholder engagement & “Say on Pay” results    47
  2.    2019 Company & segment performance    48
     a.    Company performance    48
     b.    Segment performance    48
  3.    Executive compensation program features    50
     a.    Executive pay components & variable pay mix    50
     b.    Compensation risk management features    51
        i.    Pay practices    51
        ii.    Multiple cancellation & clawback features    52
        iii.    Stock ownership & retention
requirements
   52
 

 

46      BANK OF AMERICA


Table of Contents

   Compensation discussion and analysis   

 

 

1. Executive summary

a. Executive compensation philosophy

Our compensation philosophy is to pay for performance over the long-term, as well as on an annual basis. Our performance considerations include both financial and non-financial measures—including the manner in which results are achieved—for the company, line of business, and the individual. These considerations reinforce and promote Responsible Growth and maintain alignment with our Risk Framework. Our executive compensation program provides a mix of salary, incentives, and benefits paid over time to align executive officer and shareholder interests. Our Compensation and Human Capital Committee has the primary responsibility for approving our compensation strategy and philosophy, and the compensation programs applicable to our named executive officers listed below. With respect to Mr. Moynihan’s compensation, our Compensation and Human Capital Committee makes a recommendation that is further reviewed and approved by the independent members of the Board.

 

 

Named executive officers

    
 

Brian T. Moynihan

   Chairman and Chief Executive Officer
 

Paul M. Donofrio

   Chief Financial Officer
 

Dean C. Athanasia

   President, Retail and Preferred & Small Business Banking
 

Geoffrey S. Greener

   Chief Risk Officer
 

Thomas K. Montag

   Chief Operating Officer

b. 2019 Executive compensation highlights

 

 

Our design is aligned with our focus on Responsible Growth and has been consistent for more than 7 years, receiving an average of 94.5% shareholder support during that period, and includes:

 

  O   

a mix of fixed and variable pay,

  O   

cancellation and clawback features in all equity-based incentives, and

  O   

the deferral of a majority of variable pay through equity-based incentives.

 

 

Our risk management practices encourage sustainable performance over time

 

 

Total compensation awarded to Mr. Moynihan for 2019 is $26.5 million, unchanged from 2018

 

 

94.3% of Mr. Moynihan’s 2019 awarded total compensation is variable and directly linked to company performance

 

 

Half of Mr. Moynihan’s 2019 variable pay is awarded as performance restricted stock units and must be re-earned, meaning 100% of the award is the maximum that can be earned, and vesting occurs only if performance standards are met over a three-year period

 

 

50% of net after-tax shares Mr. Moynihan receives as compensation must be retained until one year after retirement

c. Shareholder engagement & “Say on Pay” results

 

We conduct shareholder engagement throughout the year and provide shareholders with an annual opportunity to cast an advisory “Say on Pay” vote. At our 2019 annual meeting of shareholders, out of approximately 9.6 billion shares outstanding and entitled to vote nearly 96% of the approximately 7 billion votes cast favored our “Say on Pay” proposal. This is our highest “Say on Pay” approval result to date and represents the 9th consecutive year of “Say on Pay” approval of 92% or higher. Additionally, in 2019 and early 2020, management and directors met with investors owning approximately 31% of our outstanding common shares and, at the majority of these meetings, discussed our executive compensation program, human capital management, and other compensation-related matters. These discussions, together with the 2019 “Say on Pay” results, indicated strong support for our 2018 compensation program and influenced our decision to maintain a consistent overall approach for 2019.    
   

 

Historical “Say on Pay” votes

 

LOGO

 

   

 

2020 PROXY STATEMENT      47


Table of Contents

   Compensation discussion and analysis   

 

 

2. 2019 Company & segment performance

We achieved strong results in 2019. We continued our focus on what we control and drive: growing loans and deposits, managing our cost base while innovating and making necessary investments, and using a strong balance sheet to return capital to our shareholders. We are doing this responsibly and within our Risk Framework while listening to our clients, communities, and employees when they answer the question: “What would you like the power to do?”. We closed 2019 with a company that we believe is stronger, safer, and more efficient and are ready to deliver Responsible Growth again in 2020.

Following are financial highlights and key measures of company and line of business performance that our Compensation and Human Capital Committee considered in evaluating the 2019 performance of our named executive officers.

a. Company performance

 

LOGO

 

  Net income of $27.4 billion, or $2.75 per diluted share, compared with $28.1 billion and $2.61 per share in 2018

 

  Excluding 3Q impairment charge, net income for 2019 was $29.1 billion, or $2.93 per diluted share*

 

  Return on average assets (ROA) of 1.14%, return on average common shareholders’ equity of 10.62%, and return on average tangible common shareholders’ equity of 14.86%*

 

  Book value per share increased to $27.32 in 2019; and tangible book value per share increased to $19.41 in 2019*

 

  Net charge-off ratios remained near historic lows

 

  Noninterest expense of $54.9 billion; $52.8 billion excluding the 3Q impairment charge,* continuing the company’s focus on operating cost controls while increasing the company’s minimum hourly wage

 

  Common equity tier 1 ratio of 11.2%, remained well above our 9.5% regulatory requirement

 

  Business referrals increased 10.9% to 7.8 million in 2019, due to continued focus on customer-driven strategy

 

  Returned $34 billion in capital to shareholders through common dividends and share repurchases while investing in the company, our employees, and communities we live and work in across the globe

 

  Total shareholder return above primary competitor group average, as well as the S&P 500 Index average, on a 1-year, 3-year, and 5-year basis

 

*   Represents a non-GAAP financial measure. See Appendix A for a reconciliation of GAAP and non-GAAP financial measures.

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b. Segment performance

 

Business

($ in millions)

Total

revenue(1)

Provision

for credit

losses

Noninterest

expense

Net income

(loss)

2019 2018 2019 2018 2019 2018 2019 2018
               

Consumer Banking

  38,587   37,618   3,772   3,664   17,618   17,672   12,984   12,132
               

Global Wealth & Investment Management

  19,537   19,453   82   86   13,823   14,015   4,252   3,988
               

Global Banking

  20,483   20,001   414   8   9,017   8,745   8,068   8,325
               

Global Markets

  15,614   16,183   (9 )     10,722   10,835   3,504   3,958
               

All Other(2)

  (2,382 )   (1,625 )   (669 )   (476 )   3,720   1,887   (1,378 )   (256 )
               

Total Corporation

  91,244   91,020   3,590   3,282   54,900   53,154   27,430   28,147

 

     
         2019 Adjusted Total Corporation(3)   Noninterest Expense = $52,828 million    Net Income = $29,129 million         

 

(1)

Bank of America Corporation reports its results of operations, including total revenue, for each business segment and All Other on a fully-taxable equivalent (FTE) basis. Total revenue for Bank of America Corporation on an FTE basis was $91,839 million for 2019 and $91,630 million for 2018, which are non-GAAP financial measures. FTE basis adjustments were $595 million and $610 million in 2019 and 2018. See Appendix A for more information about total revenue of Bank of America Corporation on an FTE basis.

 

(2)

“All Other” consists of asset and liability management activities, equity investments, non-core mortgage loans and servicing activities, liquidating businesses, and certain expenses not otherwise allocated to a business segment.

 

(3)

Represent non-GAAP financial measures. See Appendix A for a reconciliation of GAAP and non-GAAP financial measures.

 

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Segment highlights(1)

The Compensation and Human Capital Committee believes the company and segment performance highlights discussed below, as well as other company and business results, reflect that management is delivering Responsible Growth, continuing to streamline and simplify our company, and driving operational excellence. The four segments are comprised of our eight lines of business which are how we serve the core financial needs of people, companies, and institutions.

 

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(1) Segment highlights compare to 2018 unless otherwise noted.

(2) Represents a non-GAAP financial measure. See Appendix A for a reconciliation of GAAP and non-GAAP financial measures.

 

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3. Executive compensation program features

a. Executive pay components & variable pay mix

Our Compensation and Human Capital Committee determines the pay for our named executive officers for each performance year. For the CEO, a portion of the compensation is delivered as base salary and the remainder as restricted stock units. For named executive officers other than the CEO, a portion of the compensation is delivered as base salary and the remainder as annual cash incentive and restricted stock units.

Restricted stock units are divided into two components: time-based and performance-based. Our time-based awards vest ratably over three years except for the CEO’s cash-settled restricted stock units that vest over one year. Our performance-based awards continue to use a re-earn approach, meaning 100% of the award is the maximum that can be earned, and vest only if performance standards are met over a three-year period. Future adverse performance below these standards will decrease the amount paid, and no PRSUs will be re-earned if results are below the minimum standards.

We believe this pay-for-performance structure, which emphasizes variable pay, helps motivate our executives to deliver sustained shareholder value and Responsible Growth.

The following chart provides an overview of the 2019 pay components for our named executive officers, including the vesting and performance standards that provide a multi-year lookback on 2019 achievements. These pay components, including the vesting and performance standards, are unchanged from last year.

 

 

Performance Year 2019 Pay Components

 

Description   How it pays

Base salary

 

  Determined based on job scope, experience, and market comparable positions; provides fixed income to attract and retain executives and balance risk-taking

 

  Semi-monthly cash payment through 2019

Annual cash incentive—except CEO

 

  Provides short-term variable pay for the performance year for non-CEO executives

 

  Single cash payment in February 2020

Cash-settled restricted stock units (CRSUs)—CEO only

 

  Track stock price performance over 1-year vesting period

 

  Vest in 12 equal installments from March 2020 – February 2021

 

  Granted in February 2020

 

  Cash-settled upon vesting

Performance restricted stock units (PRSUs)

 

  Vest based on future achievement of specific return on assets and growth in adjusted tangible book value (TBV) standards over 3-year performance period

 

  Track company and stock price performance

 

  Encourage sustained earnings during the performance period; future adverse performance below these standards will decrease the amount paid

 

  Granted in February 2020

 

  If performance standards are achieved, grants will be re-earned at the end of the performance period (2022)

 

  100% is the maximum that can be re-earned

 

  If both threshold standards are not achieved, the entire award is forfeited

 

  Stock-settled to the extent re-earned

See “Results for performance restricted stock units” on page 58 for the vesting and value of prior awards.

Time-based restricted stock units (TRSUs)

 

 

  Track stock price performance over 3-year vesting period

 

  Align with sustained longer-term stock price performance

 

  Granted in February 2020

 

  Vest in three equal annual installments beginning in February 2021

 

  Stock-settled upon vesting

 

 

 

Performance Year 2019 Variable Pay Mix

 

  A majority of variable pay is delivered as equity-based awards that reflect the balance between short-term and long-term results

 

  The charts below illustrate the variable pay mix for our CEO and other named executive officers

 

 

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b. Compensation risk management features

Our Compensation and Human Capital Committee believes that the design and governance of our executive compensation program encourage executive performance consistent with the highest standards of risk management.

i. Pay practices

Highlighted below are the key features of our compensation program for executive officers, including the pay practices we have implemented to drive Responsible Growth, encourage executive retention, promote conduct consistent with our values, and align executive and shareholder interests. We also identify certain pay practices we have not implemented because we believe they do not serve our risk management standards or shareholders’ long-term interests.

 

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What

We Do

   

 

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Pay for performance and allocate individual awards based on actual results and how results were achieved

 

 

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Use balanced, risk-adjusted performance measures

 

 

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Review feedback from independent control functions in performance evaluations and compensation decisions

 

 

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Provide appropriate mix of fixed and variable pay to reward company, line of business, and individual performance

 

 

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Defer a majority of variable pay as equity-based awards

 

 

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Apply clawback features to all executive officer variable pay

 

 

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Require stock ownership and retention to retirement of a significant portion of equity-based awards

 

 

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Engage with shareholders on governance and compensation

 

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Prohibit hedging and speculative trading of company securities

 

 

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Grant equity-based awards on a pre-established date to avoid any appearance of coordination with the release of material non-public information

     

 

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What

  We Don’t  

Do

   

 

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Change in control agreements for executive officers

 

 

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Severance agreements for executive officers

 

 

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Multi-year guaranteed incentive awards for executive officers

 

 

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Severance benefits to our executive officers exceeding two times base salary and bonus without shareholder approval per our policy

 

 

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Accrual of additional retirement benefits under any supplemental executive retirement plans

 

 

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Excise tax gross-ups upon change in control

 

 

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Discounting, reloading, or repricing stock options without shareholder approval

 

 

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Single-trigger vesting of equity-based awards upon change in control

 

 

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Adjust PRSU results for the impact of litigation, fines, and penalties or impairment charges

     

Additionally, it is not our policy to provide for the accelerated vesting of equity awards upon an employee’s voluntary resignation to enter government service. We do not anticipate changing our approach.

The “Compensation governance and risk management” discussion beginning on page 26 contains more information about our Compensation Governance Policy and our compensation risk management practices. That section describes our Chief Risk Officer’s review and certification of our incentive compensation programs and our Chief Audit Executive’s risk-based review of our incentive plans. We also describe the extent to which our CEO participates in determining executive officer compensation, and the role of Farient Advisors, the Committee’s independent compensation consultant.

 

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ii. Multiple cancellation & clawback features

Our equity-based awards are subject to three separate and distinct features that can result in the awards being cancelled or prior payments being clawed back in the event of certain detrimental conduct or financial losses. We believe these features encourage appropriate behavior and manage risk in our compensation program. Our named executive officers are subject to all three cancellation and clawback features.

 

    Detrimental conduct
cancellation & clawback
 

Performance-based

cancellation

  Incentive compensation
recoupment policy

    Who    

 

  Applies to approximately 18,700 employees who received equity-based awards as part of their 2019 incentive compensation, as well as all recipients of our special equity-based awards granted in February 2019

 

  Applies to approximately 4,800 employees who are deemed to be “risk takers” and received equity-based awards as part of their 2019 compensation

 

  “Risk takers” defined according to banking regulations and company policies

 

 

  Applies to all of our executive officers

 

  Our policy covers a broader group of executives than required by the Sarbanes-Oxley Act, which covers only the CEO and Chief Financial Officer

    When    

 

  An employee engages in certain “detrimental conduct,” including:

 

O  illegal activity

 

O  breach of a fiduciary duty

 

O  intentional violation or grossly negligent disregard of our policies, rules, and procedures

 

O  trading positions that result in a need for restatement or significant loss

 

O  conduct constituting “cause”

 

 

  Our company, a line of business, a business unit, or an employee experiences a loss outside of the ordinary course of business and the employee is found to be accountable based on:

 

O  the magnitude of the loss

 

O  the decisions that may have led to the loss

 

O  the employee’s overall performance

 

  When fraud or intentional misconduct by an executive officer causes our company to restate its financial statements

    What    

 

  All unvested equity awards will be cancelled

 

  Any previously vested award may be recouped, depending on the conduct

 

  All or part of the outstanding award may be cancelled

 

  Any incentive compensation may be recouped as determined by the Board or a Board committee

 

  Any action necessary to remedy the misconduct and prevent its recurrence may be taken

 

Since 2011, all of our equity-based awards provide that they are subject to any final rules implementing the compensation clawback provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) that the SEC and NYSE may adopt. We intend to update our policies to reflect any applicable rules implementing the Dodd-Frank Act clawback requirements that are finalized, released, and become effective.

Pursuant to our Incentive Compensation Forfeiture & Recoupment Disclosure Policy, we will disclose publicly the incentive forfeitures or clawbacks recovered from certain senior executives in the aggregate pursuant to our Detrimental Conduct and Incentive Compensation Recoupment policies described above, subject to certain privacy, privilege, and regulatory limitations.

iii. Stock ownership & retention requirements

Our stock ownership and retention requirements align executive officer and shareholder interests by linking the value realized from equity-based awards to sustainable company performance. Beginning with awards granted for 2012, our Corporate Governance Guidelines require:

 

Minimum shares of common stock owned

  

Retention

   

Chief Executive Officer

   500,000 shares   

50% of net after-tax shares received from equity-based awards retained until one year after retirement

 

   

Other Executive Officers

   300,000 shares   

50% of net after-tax shares received from equity-based awards retained until retirement

 

New executive officers have up to five years to be in compliance with these requirements. Full-value shares and units owned, awarded, or deemed beneficially owned are included in the stock ownership calculations; PRSUs are included only when earned and stock options are not included. Our Code of Conduct prohibits our executive officers from hedging and speculative trading of company securities. See the “Hedging policy” section on page 28 for more information on our hedging policy and rules.

 

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4. Compensation decisions and rationale

a. Pay evaluation & decision process

Each year, our Compensation and Human Capital Committee reviews our named executive officers’ performance using a balanced and disciplined approach to determine their base salaries and variable compensation awards. The approach for 2019 included a range of performance and governance considerations as inputs into compensation decisions.

 

 

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*

Pages 54 through 56 provide material factors aligned to each of the four tenets the Committee considered.

 

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b. Individual performance highlights

 

 

Brian T. Moynihan

 

Mr. Moynihan has served as the Chief Executive Officer of Bank of America Corporation since January 2010 and as Chairman of our Board since October 2014.

 

 

Grow and win in the market

 

   Reported net income of $27.4 billion in 2019 including a $1.7 billion non-cash after-tax 3Q impairment charge related to the notice of termination of our merchant services joint venture at the conclusion of its current term, down 3% from 2018; excluding this impairment charge, net income was $29.1 billion, up 3% from 2018(1)

 

   Revenue of $91.2 billion, held relatively flat compared to 2018 despite the headwinds of a reversal in interest rate directions as solid client activity resulted in good loan and deposit growth

 

   Returned $34 billion of capital to shareholders through common dividends and share repurchases, 34% higher than 2018

 

   Demonstrated consistent Responsible Growth with regard to managing costs while increasing the company’s minimum hourly wage. 2019 noninterest expense was $54.9 billion, $52.8 billion excluding the 3Q impairment charge,(1) compared to $53.2 billion in 2018

 

   Annual total shareholder return of 46.2% (compared to -15.0% in 2018) is above primary competitor group average, as well as the S&P 500 Index average, on a 1-year, 3-year, and 5-year basis

 

 

Grow with our customer–focused strategy

 

   Best Bank in the World by Global Finance magazine

 

   Continued to deliver One Company, humanize Responsible Growth, and modernize our brand with next generation positioning “Power to” initiative

 

   In 2019 became the first financial services company to be both mobile app and online banking-certified by J.D. Power for providing “Outstanding Customer Experience”

 

   Continued to drive new capabilities for 38 million digital banking users with use of Erica (AI-driven financial digital assistant) surpassing 10 million users and increased volume of transactions through Zelle (digital payments app) increasing to over $78 billion in 2019

 

   Consistent average loan and deposit growth across the business: total average loans and leases grew 2.7% compared to 2018 and total average deposits increased for more than 11 years to $1,380 billion in 2019

 

 

Grow within our Risk Framework

 

   Successful submission of the 2019 stress test and resolution plan; 22% increase in dividends per common share as compared to 2018

 

   Credit ratings continue to improve; upgraded by all three agencies in the past 24 months and rated at the top of the range of its primary U.S. competitors by S&P and Moody’s

 

   Continued to focus on proactive risk management, strong governance, and discipline in client selection and underwriting standards to drive Responsible Growth

 

   Reduced non-performing loans, leases, and foreclosed properties by 27%, continuing the decline each year since 2009; net charge-off ratio continued to decline to 38 bps compared to 41 bps in 2018

 

 

Grow in a sustainable manner

 

   Dow Jones Sustainability Index recognized ESG efforts, marking the sixth year to be named to the World Index and the seventh consecutive year named to the North America Index

 

   Highest ranked global bank in Fortune’s Change the World list of companies

 

   Continued to execute on our strategy to transform into a leaner, stronger and simpler company; driving a more efficient and sustained management structure and culture through Simplify and Improve, Organizational Health and Operational Excellence initiatives

 

   Delivered $125 billion goal to mobilize capital to low-carbon, sustainable business activities six years ahead of schedule, announced new 10-year $300 billion environmental business commitment

 

   Delivered approximately $250 million in philanthropic investments to drive economic mobility and social progress in the communities we serve from the Bank of America Charitable Foundation

 

   All enterprise diversity scorecard metrics are up year-over year across the enterprise as compared to 2018

 

   Served as Chairman of the Bank Policy Institute and the World Economic Forum’s International Business Council, helping shape industry and broader public company positions on economic policy, job creation, and corporate/investor sustainability metrics for long-term value creation

 

   Industry leader in being a great place to work:

 

O   Best Big Companies to Work For (only financial services company recognized) and 100 Best Companies to Work For by Fortune in 2019 and as recently announced, included again on both lists for 2020

 

O   The company published its first ever human capital management report, disclosing the breadth and depth of the investment in its people, including a robust reporting of key metrics across diversity and inclusion, employee satisfaction, and turnover.

 

O   Accelerated the increase in minimum rate of pay, to be raised to $20 per hour (from $17) in the first quarter of 2020 for all hourly U.S. employees

 

O   2019 Catalyst Award, which recognizes companies who display innovative organizational efforts to advance women in the workplace

 

O   2019 Bloomberg Gender-Equality Index for the fourth year

 

O   World’s Best Bank for Diversity and Inclusion by Euromoney for the third time in four years

 

O   Named to 2019 Best Companies for Dads list for the second year in a row and 100 Best Companies list for the 31st consecutive year by Working Mother

 

See “Being a great place to work” on page 35 for additional external recognition.

 

 

 

(1)

Represents a non-GAAP financial measure. See Appendix A for a reconciliation of GAAP and non-GAAP financial measures.

 

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Paul M. Donofrio

 

Mr. Donofrio is Chief Financial Officer, with responsibility for the overall financial management of the company, including accounting, financial and regulatory reporting, balance sheet management, financial planning and analysis, corporate treasury, investor relations, corporate investments, and tax. His responsibilities also include leading Enterprise Cost Management, a company-wide initiative that is central to delivering operational excellence and Responsible Growth.

 

 

Grow and win in the market

 

   Drove company expense management efforts resulting in noninterest expense of $54.9 billion ($52.8 billion excluding the 3Q impairment charge),(1) compared with $53.2 billion in 2018; achieved while increasing investments in technology, company initiatives, communities we serve, and our associates

 

   Provided transparency and strategic insights to business leaders (e.g., expense and forecast discussions, loan and deposit trends) contributing to enhanced decision-making

 

   Continued active engagement with shareholders driving messages of Responsible Growth and controlling what we can control; the common stock price increased 42.9% while delivering $34 billion in capital back to shareholders in 2019 through share repurchases and dividends

 

 

Grow with our customer-focused strategy

 

   Effectively delivered both holistic and detailed context of enterprise strategy, including Responsible Growth, through increased interactions with media, sell-side analysts, and investors

 

   Strengthened strategic partnership with businesses through enhanced engagement on capital, liquidity, and returns

 

 

Grow within our Risk Framework

 

   Successfully implemented accounting changes, enhancing transparency of overall financial and regulatory reporting and continued accuracy and timeliness of reports

 

   Led efforts to achieve strong ratios across key financial metrics, demonstrating the safety and soundness of our balance sheet and liquidity

 

   Enhanced CFO processes and controls to promote robust consideration and monitoring of all key risks across the company’s Risk Framework

 

 

Grow in a sustainable manner

 

   Evolved the CFO operating model to better align management responsibilities and centralize activities for more effective and efficient execution

 

   Strengthened our focus on operational excellence and led location strategy efforts, resulting in CFO work being more accurate, less risky, and more efficient

 

   Expanded comprehensive talent management processes focused on developing, retaining, and promoting visibility for top performers and diverse talent; within senior roles, female representation increased 8% and Black/African American representation increased 27% compared to 2018

 

   Significantly improved the CFO function’s employee engagement results by listening to CFO employees and revamping efforts to make the organization a Great Place to Work

 

 

Dean C. Athanasia

 

Mr. Athanasia is the head of Retail and Preferred & Small Business Banking, where he is responsible for serving approximately 66 million consumer and small business clients in the United States with a full range of products and services, delivered with unmatched convenience and exceptional client experience.

 

 

Grow and win in the market

 

   Increased Consumer Banking revenues by 3% from 2018 to $38.6 billion and net income by 7% from 2018 to $13.0 billion

 

   Reduced the efficiency ratio for Consumer Banking to 46% in 2019, down 132 bps compared to 2018

 

   Increased Consumer Banking average client assets by 8% year-over-year to $1.2 trillion

 

 

Grow with our customer-focused strategy

 

   Named North America’s Best Digital Bank by Euromoney in July 2019, one of 60 industry awards won by Consumer Banking

 

   Strong focus on client experience, reaching an all-time high with 84% of Consumer and Small Business clients rating Bank of America a 9 or 10 on a 10-point scale

 

   Mobile banking users continued to grow, up 10.4% to 29.2 million in 2019. Erica continued to be the industry’s leading AI assistant, surpassing 10 million total users since launch

 

 

Grow within our Risk Framework

 

   Ranked #1 in total Retail Deposit Share, per 2019 FDIC data, while constantly monitoring and adjusting to the competitive landscape

 

   Continued to streamline operations through significant investment in technology, financial centers, and client professionals

 

 

Grow in a sustainable manner

 

   Committed to supporting individuals and businesses in underserved communities; one-third of our financial centers and ATMs located in low and moderate-income neighborhoods

 

   Continued focus on building a strong, diverse workforce to better reflect the clients and communities we serve and to provide a diverse pipeline for future leaders, with 59% ethnically diverse employees

 

   Decreased Consumer Banking noninterest expense by $54 million year-over-year to $17.6 billion, driven by lower FDIC expense, operating efficiencies, and digitization

 

For additional details on Consumer Banking performance, see “2019 Company & segment performance” on page 48.

 

(1)   Represents a non-GAAP financial measure. See Appendix A for a reconciliation of GAAP and non-GAAP financial measures.

 

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Geoffrey S. Greener

 

Mr. Greener is Chief Risk Officer and is responsible for overseeing the company’s governance and strategy for global risk management, including relationships with key regulators and supervisory institutions worldwide.

 

 

Grow and win in the market

 

   Supported Responsible Growth across lines of business while encouraging focus on strong client selection and disciplined underwriting within the company’s risk appetite; total average loans and leases in all business segments grew 5.0% year-over-year

 

   Continued company-wide engagement to reinforce that managing risk well is foundational to serving our customers and growing responsibly

 

   The company received upgrades to debt ratings from Moody’s, highlighting stress tests results versus peers, a more cautious approach to loan growth, and strict limits on concentrations as factors

 

 

Grow with our customer-focused strategy

 

   Continued strong asset quality across the portfolio with a fourth quarter 2019 net charge-off ratio of 39 bps, flat from the fourth quarter of 2018 and down 14 bps from the fourth quarter of 2017

 

   Nonperforming loans of $3.8&nbs