From the Commons

Boston Common’s Testimony on FleetBoston – Bank of America Merger

BOSTON – The Federal Reserve’s public comment period on Bank of America’s acquisition of FleetBoston ends today, but shareholders still have questions. Socially-responsible investment managers and religious investors today announced they have filed shareholder resolutions at both FleetBoston and Bank of America requesting detailed information on the impact the merger will have on communities around the nation, and especially here in New England.

“It is hard to overstate the impact this merger will have on the banking sector,” said Lauren Compere of Boston Common Asset Management, which is the primary filer of both resolutions. “We’re talking about a $47 billion takeover and a new company with combined assets of almost $1 trillion. Prudent investors need to know how community investments, jobs, and even philanthropic giving will change.”

The resolutions call for reporting on “director and executive compensation, community reinvestment activities, employment levels and philanthropic commitment for communities in which Fleet is based.

Fleet subsidiary First Community Bank has received national acclaim for its approach to serving multicultural and multilingual customers. Investors want to know if these sorts of innovative institutions will be lost in the merger, or if Bank of America intends to leverage its new assets to strengthen its community banking.

Investors also have significant “bread-and-butter” concerns. Former Fleet chief Terrence Murray may see a $35 million payoff from the merger, and current Chairman Charles Gifford could gain over $30 million. Meanwhile, Fleet employees face job losses to facilitate the merger’s $1.6 billion in estimated cost savings. Those job losses will hit back-end employees, the lowest-paid and least well-equipped to deal with layoffs.

Joining Boston Common Asset Management is a broad-based coalition of SRI investors including The Brethren Benefit Trust, Inc., The Fund for the Center for Community Change, The Community Church of New York, Ethical Funds, Inc, Missionary Oblates of Mary Immaculate, New York Yearly Meeting Religious Society of Friends, and Trillium Asset Management. All are affiliated with the Interfaith Center on Corporate Responsibility, a thirty-year-old coalition of faith-based institutions with combined assets worth an estimated $100 billion.

“Fleet has been a leader,” Ms. Compere said, “in everything from volunteerism to community re-investment. If we lose that leadership, that is a blow to Boston, and to the banking sector generally.”

Fleet’s $25 million in annual philanthropic gifts make it one of the New England region’s most generous donors, supporting economic opportunity, youth development, and public education. In 2002, 22,000 Fleet employees used paid volunteer days to perform 120,000 hours of community service.

“This is a justice issue,” said Seamus Finn of the Missionary Oblates. “Justice for the communities Fleet serves, and justice for the employees who have made Fleet a leader in corporate citizenship. This is the largest merger in Boston history. Clearly, shareholders have a lot of questions.”

Published On: December 15, 2003Categories: From the Commons
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