Shareholder Proposals Challenge Wall Street’s Top Executives’ Authority

Wall Street’s top executives are facing a new challenge this spring as shareholders push for a separation of CEO and chairman roles. The CEOs of Goldman Sachs, Bank of America, JPMorgan Chase, BlackRock, and Citigroup are all under scrutiny as investors vote on proposals to strip them of their dual titles.

The debate over splitting the CEO and chairman positions has been ongoing for years, with activists arguing that it reduces conflicts within organizations. However, companies often push back, claiming that a lead director can provide independent oversight.

In 2024, shareholders at S&P 500 companies have submitted 29 proposals to separate CEO and chairman roles, with more expected, according to proxy advisory firm Institutional Shareholder Services (ISS). This trend is not limited to Wall Street, as companies in the financial sector like AIG, Allstate, Prudential Financial, Intercontinental Exchange, and KeyCorp are also facing similar proposals.

The pressure to split the roles intensified after the 2008 financial crisis, with a significant number of S&P 500 companies adopting the practice by 2023. Last year, 69 companies faced such proposals, but all failed to pass.

The upcoming votes at Goldman Sachs and Bank of America will be closely watched, especially as Goldman’s CEO David Solomon navigates a challenging year with declining profits and high-profile departures. ISS and Glass Lewis are advising shareholders to vote in favor of separating Solomon’s roles.

The debate over CEO and chairman roles is not limited to Wall Street, as Larry Fink of BlackRock and Jamie Dimon of JPMorgan Chase also face similar proposals. The outcome of these votes could have far-reaching implications for corporate governance in the financial sector.