Anti-Takeover Step Sought by BankAmerica : Proxy Shows Armacost Took Pay Cut in 1985
BankAmerica is asking its shareholders to approve a change in the firm’s corporate bylaws to discourage hostile takeover attempts.
The provision, presented in proxy materials mailed Friday, would require that all shareholder actions be taken only at the company’s annual meeting or at a special shareholder meeting.
The effect of the measure, if approved at BankAmerica’s annual meeting April 29, would be to add a costly and time-consuming roadblock to potential acquirers.
The proxy statement also revealed that BankAmerica President and Chief Executive Samuel H. Armacost took a $53,750 pay cut from the previous two years. He was paid $575,000 in 1985, compared to $628,750 in 1983 and 1984. The bank did not say how much of Armacost’s total compensation was given as a performance bonus.
BankAmerica is the parent of San Francisco’s troubled Bank of America, the nation’s second-largest bank. The firm lost $337 million last year, primarily because of bad loans in agriculture, real estate, shipping and the Third World.
The bank’s board of directors approved the anti-takeover provision after fending off two recent unsolicited efforts to assume control of the company.
New York financier Sanford I. Weill, the former president of American Express, in January offered to raise $1 billion in new capital for the bank in exchange for the chief executive’s post. Weill’s bid was rebuffed by the board.
A second approach came last month from J. J. Pinola, chief executive of First Interstate Bancorp, a multibank holding company based in Los Angeles. Pinola made a friendly, tentative offer to acquire BankAmerica, but his advances, too, were rejected.
BankAmerica’s anti-takeover measure would force anyone who wished to gain shareholder approval for action against the bank’s board or management to first call a special meeting of shareholders. Calling such a meeting would require a majority vote of shareholders. Under current company bylaws, a suitor can gain shareholder approval for the sale of the company or a change in management or directors by written consents sent through the mail.
Discourage Hostile Suitors
The bank said the aim of the provision is to discourage unfriendly approaches by substantially prolonging the process of gaining shareholder approval for changes in control of the board of directors. The bank could use the additional time to mount a counteroffensive.
“The board believes that action by shareholders on any matter should be taken only after all concerned have had a reasonable opportunity to present their positions on the matter,” the bank said in its proxy statement.
Chase Manhattan, the nation’s third-largest banking company, also is asking shareholders to approve anti-takeover measures.
Chase is seeking a similar provision requiring actions by shareholders to be taken only at an annual or special meeting, as well as staggered board terms and a “fair price” provision that would prevent a potential buyer from not treating all holders equally.
Analysts said the Chase and BankAmerica actions may signal a trend. The nation’s largest banks long have been assumed to be immune from hostile takeovers. But BankAmerica’s recent problems and efforts to assume control have made other bank executives wary.
BankAmerica on Friday also disclosed that Peter O’Malley, president of the Los Angeles Dodgers, would not seek reelection to the board at the April annual meeting.
