Bank of America – Report on the Social Impact of the Bank of America – Fleet Boston Merger (2003 – 2004)
Outcome: Successfully Withdrawn
RESOLVED: Shareholders request that our Board review the impact of the Company’s merger with FleetBoston and report to shareholders by August 2004. This report, developed at reasonable cost and omitting proprietary information, would identify the merger’s impact on: employment levels, director and executive compensation, philanthropic commitment and community reinvestment activities for communities in which Fleet is based.
Bank of America’s $47 billion takeover of FleetBoston is the biggest takeover in Boston history. The resulting company, the nation’s second-largest bank, will serve 33 million customers in 29 states, hold $542 billion in deposits, and control nearly $1 trillion in assets. The merger will give Bank of America control over 9.8% of domestic deposits, (slightly below the 10% national deposit cap).
Connecticut Attorney General Richard Blumenthal stated, “This mega-merger raises very profound questions that require strong action to investigate and protect consumers.”
Director and Executive Compensation
Former Fleet chief Terrence Murray may see a $35 million payoff. Current Chairman Charles Gifford could gain over $30 million.
While Fleet’s senior executives reap the economic benefits of the merger, what happens to the Fleet employees that face job loss as part of the $1.6 billion in estimated cost savings?
Bank of America officials expect almost $1.6 billion in cost savings from the merger, some of it from job cuts. Fleet has stated “a significant part of the new organization will be based in the Northeast, including our wealth management, leasing, asset-based lending, premier banking, small business services and Latin American businesses.”
Nonetheless, Fleet CEO Gifford acknowledged that there would be some job layoffs:, despite steady overall staffing levels. “You can’t have something in a tablet that says it will be this way forever.”
Senator Charles Schumer of New York said he is most concerned that the approximately 3,800 jobs at Fleet administrative centers in New York State would be eliminated.
Philanthropic CommitmentFleet’s $25 million in annual philanthropic gifts make it one of the region’s most generous donors supporting economic opportunity, youth development and public education. In 2002, 22,000 Fleet employees used two paid volunteer days to perform 120,000 hours in community service.
“Charitable giving will remain the same, and I hope they will grow tremendously with Bank of America,” Gifford said. (Boston Globe, 10/28/2003).
Bank of America must ensure that Fleet’s strong legacy of civic leadership, community service, and enduring partnerships in the communities continues by maintaining FleetBoston Financial Foundation as separate entity post merger.
CRA ActivitiesIn 2000 as part of the Fleet/BankBoston merger, our company committed to 5 –year, $14.6 billion investment in communities including small business/small farm lending, affordable mortgage lending, consumer lending, community development lending and investments in LMI/LIHTC. With almost $2.5 billion remaining, Bank of America must ensure that the remaining level of commitment is carried through post-merger.
Bank of America should also maintain post-merger Fleet’s First Community Bank whose innovative approach to serving its multicultural and multilingual customers with a deposit and credit products tailored to meet their needs is nationally acclaimed.