B of A Refuses to Set Date for Resuming Dividend
BankAmerica executives put on their “recovering bank” show at the corporation’s annual meeting Thursday, but there was no answer to the question uppermost in the minds of stockholders: When will the company resume paying a dividend?
A. W. Clausen, chairman of the state’s largest banking company, refused to predict when the dividend would be resumed despite efforts of several stockholders to pin him down in 90 minutes of questions and answers that sometimes got a little nasty.
Clausen said during the meeting at the Masonic Memorial Temple here that the dividend will be resumed “as soon as possible,” but he refused even to guess when.
What is needed, Clausen said, is more quarters of solid profitability before the bank can resume dividend payments, which were halted in November, 1985, when the bank was in the midst of a slide toward $1.8 billion in losses in three years.
Not Everyone Mollified
“We’ve stopped the bleeding,” he said Thursday. “The patient is recovering. But we still have a very rigorous period ahead of us before we achieve the capital base and the earnings improvements which are required to validate our complete return to strength and the restoration of a dividend.”
Clausen flashed several slides on a giant screen in the auditorium to show progress in increasing the company’s earnings and improving the quality of the loan portfolio at Bank of America, the company’s chief subsidiary. But not all of the shareholders were mollified.
Several of them called for Clausen to resign and several challenged his $100,000 salary increase to $675,000 a year. In addition, Clausen received another $100,000 in bonus and deferred compensation in 1987.
Expects Improvement
“You cost me a quarter of a million dollars, and I’m not happy with you,” Lloyd Ralston, a shareholder from Los Gatos, told Clausen in reference to the drop in the company’s stock price and the suspension of dividends.
Several other shareholders, however, expressed support for Clausen and the bank’s management and seemed convinced that the bank is on the mend.
BankAmerica has reported improved earnings for the last three quarters, and Clausen said indications are that the second quarter of 1988 will be better than the first three months, when the company reported net income of $109 million.
Despite its continued low stock price, Clausen said he does not believe BankAmerica is a takeover target. He said the company’s size would make a takeover difficult and that he hopes the improved performance will keep shareholders happy with the current management.
