He certainly had ample time.
This week marks a turning point for Bank of America CEO Brian Moynihan, as he prepares for his first “Investor Day” since 2011—a notable 14-year gap that underscores his poor track record in investor communication.
Moynihan, now 66, has only recently put a succession plan in place, possibly due to pressure from the bank’s board, which has been responding to shareholder calls for a solid strategy to elevate the bank’s stock price and better compete with its major rival, Jamie Dimon’s JPMorgan Chase, according to sources familiar with the situation.
BofA stands as the second-largest bank in the U.S. by assets, yet it seems to struggle on various fronts. Its stock consistently underperforms relative to JPMorgan and other prominent banks. Large banking deals often slip away to rivals like JPMorgan or Goldman Sachs. Their cautious approach to risk is seen as a hindrance to capitalizing on market volatility.
Some insiders attribute the performance issues directly to Moynihan. He began his career as general counsel at Fleet Boston, an acquisition that played a part in shaping modern BofA, and he took over as CEO in 2010 amid the aftermath of the 2008 financial crash.
Initially, he received praise for his prudent management, but critics argue that he has continued to prioritize risk reduction over seizing growth opportunities. This method of operating might explain why the stock has been lagging behind its peers.
Another point of contention is the bank’s board of directors. It has a reputation for being very supportive of its CEOs, which could explain why Moynihan only recently established a timeline for his own succession; he seems intent on retaining his position for at least five more years.
“The board and those around him have allowed this to go on for quite some time,” one insider mentioned. “Eventually, it becomes glaringly obvious how out of sync you are with your competitors.”
A Bank of America spokesperson dismissed claims that the board pushed Moynihan to schedule an annual meeting or announce a succession plan. “This day gives us a chance to present our comprehensive story—how each segment is growing and our outlook for future growth,” the spokesperson stated, further noting that 25 analysts currently support a “Buy” rating for BofA stock.
Regardless of whether it’s board pressure, employee concerns, or investor expectations—or perhaps a combination of all three—Moynihan has become more visible recently. Besides announcing a succession plan and promoting three executives for potential leadership roles, he is also attempting to clarify BofA’s new strategy through various media channels.
His latest theme is “Responsible Growth.” Insiders indicate that Moynihan remains cautious about balance sheet risks, so investors shouldn’t anticipate significant trading profits, especially compared to what might happen at firms like Goldman Sachs. However, BofA hasn’t reported unexpected trading losses. Critics often point to BofA’s consistent growth in sales and trading over the past twelve years as a metric to measure performance.
It’s worth noting that Moynihan’s cautious approach could be detrimental to shareholders. For example, in 2021, his team misjudged interest rates and invested heavily in ultra-safe government bonds, only to face losses once inflation spiked and the Federal Reserve raised rates.
Despite its extensive resources, BofA faces challenges largely because it restricts its traders from utilizing its balance sheet to support customer transactions, which hinders the best client allocations.
Moynihan won’t be alone in his presentations on Wednesday. A number of BofA executives, including regional banking head Dean Athanasia, CFO Alastair Borthwick, and head of global markets Jim Demare, are also slated to speak.
Demare is being acknowledged for his role in guiding the bank’s recent inclination to embrace capital market risks, albeit with a focus on doing so responsibly—whatever that ultimately encompasses.
