BNY Mellon shareholders keep top corporate structure

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For Bank of New York Mellon Corp., “2013 was a pretty good year,” CEO Gerald Hassell told shareholders Tuesday at the trust and custody giant’s annual meeting in New York City.

But outspoken Wall Street analyst Mike Mayo with CLSA Ltd. wanted to know why the company, which earned $2.05 billion last year, down about 16 percent from 2012, wasn’t doing better.

Mr. Mayo — who criticized BNY Mellon in a client report in February, saying the 2007 merger of Bank of New York and Pittsburgh-based Mellon Financial had not lived up to expectations — questioned the company’s expenses and profit margins in relation to its biggest competitors.

Mr. Hassell said the financial crisis and recession dramatically impacted the firm “probably more” than its peers, and that the company would continue to focus on cutting costs.

“We do need to redouble our efforts around controlling expenses,” he said.

Mr. Mayo, speaking during the question-and-answer session, said the “logical conclusion” was that BNY Mellon had too many employees when compared with its rivals.

Mr. Hassell said some of BNY Mellon’s businesses were “very people intensive.” The company has approximately 50,000 employees, including about 7,600 in the Pittsburgh region.

“I don’t think your analysis is quite on,” Mr. Hassell said. “But we are trying to make ourselves more efficient every day.”

Mr. Mayo also asked why the company had not changed the makeup of the board since the merger seven years ago.

Mr. Hassell said the company had an “experienced and talented board.”

He noted that shareholders Tuesday approved the addition of a new director — Jeffrey Goldstein, managing director of the private equity firm Hellman & Friedman — and said the board would “consider other new directors in the future.”

Also at the meeting, the audio portion of which was made available for the first time via webcast, stockholders defeated a shareholder proposal (78 percent to 22 percent) that would have split the roles of CEO and chairman of the board.

The proposal, which was opposed by BNY Mellon’s board, would have required that the chairman be an independent director who had not served as an executive officer of the company. Mr. Hassell currently holds both the chairman and CEO positions.

A similar shareholder proposal was defeated at BNY Mellon’s annual meeting in 2012.

Proposals calling for an independent board chairman have been appearing on annual meeting ballots at a growing number of companies nationwide. Proponents contend the move aids the board in protecting shareholder interests and providing independent oversight of management.

Also at the meeting, shareholders passed (93 percent to 7 percent) a “say on pay” advisory resolution approving the compensation for top executives.

Patricia Sabatini:; 412-263-3066. First Published April 8, 2014 11:07 AM

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