Good morning, everyone. Good morning, everyone. I think we'll get started right on time here. First off, I want to tell you why we're here. Some people found it convenient, some people found it less convenient. We're here because the place we had it last year is under construction, and we couldn't get them to open the place back up for us. We're here at the Marriott in South Park, and thank all of you for joining us for the 2015 annual meeting of shareholders of Bank of America Corporation. I want to thank everyone for being here in person, and I want to thank those that joined us on the webcast for joining us today. In your packet of materials, you received an agenda for our meeting and the rules of the meeting, which are now in effect.
It's my privilege to call the 2015 Bank of America Corporation annual meeting of shareholders open for business. First, I want to introduce our board of directors, and I'd ask them to stand. They're here in the front. To my board colleagues, stand. This is your board of directors, shareholders. Thank you. Next, I'd like to introduce Jack Bovender, our lead independent director, and ask Jack to say a few comments. Jack, come on.
Thank you, everyone. It's a great honor to serve as the lead independent director. I will try my best to do a really good job for all of you shareholders. I have found that this job consumes a lot more time than I thought it was going to when I was elected, and I guess it's a good thing that I'm retired from my previous employment. I also want to extend my welcome to all of you on behalf of the independent directors and tell you how much we appreciate you being investors in this great company. Thank you.
Thanks, Jack. Now to get started with the forum part of the meeting, I would like to introduce Ross Jeffries, our corporate secretary. Before I make a few comments, I'm going to ask Ross to review some of the rules of meeting. Ross?
Thank you, Brian. There are seven items that we'll consider today for shareholder votes. Each one of those items will be presented, and you'll have a chance to comment on those items at that point in time. Brian will take us through the proposals and the process for comment. When that portion of the meeting is completed, we will tabulate the votes. When the vote tabulation is complete, the preliminary results of the vote will be announced, and the formal meeting will be adjourned. A general question and answer period will follow immediately afterward for any issues not related to the proposal. If you have personal financial matters to discuss, we have customer service representatives available at the back of the room to assist you with those matters. Anyone not following these rules of conduct will be asked to leave the meeting.
Thank you, Ross. Gary Lynch, our General Counsel, has joined us today to assist with clarification of these guidelines if necessary.
Thank you, Ross. Before we move to official business, I was going to make a few comments about the company and where we stand. Your management team continues to deliver on a strategy we laid out a few years ago to make the company simple, stronger, and more customer driven. Today, I'm going to hit three points. First, where we started at the front of the economic crisis. Second, what we did to change our company. Third, where we are today and why I believe the future is bright. Let's look first at where we put the team together in January 2010. We met with you in 2010, and we told you we would drive this company from a product company to a customer-focused company.
We committed to getting out of non-core businesses across the board in order to simplify our company and make it easier to manage. We committed to dealing with the remaining issues in the crisis, specifically the mortgage issues inherited mainly from Countrywide. We also committed to reduce our expense base. We focused on strengthening the balance sheet, building capital, and the capital return. Since that time, we completed some of these tasks, and we continue to work on others. We've done all this even as an operating environment, an economic environment, was much different than we'd have said if we were sitting here five years ago. We've done it during a slow recovery and low interest rates, neither of which are great for banks. Let's talk about what we did to change our company. First, we simplified the company.
We did that by exiting a lot of businesses, reducing the geographic scope of businesses remained in the U.S., and selling or liquidating assets that did not fit the customer-focused strategy. Let me give you a couple examples. Coming out of the crisis, we exited the correspondent mortgage banking and the broker mortgage business. Why? Because those enterprises that sold us loans, we didn't deal directly with the customer. The vast majority of our issues in mortgage came from people who sold us loans. Another example is what we did in our global markets business. In our global markets business, we got out of proprietary trading, I think, 4 years ago this quarter. We gave up revenue to position ourselves for new rules. More importantly, we did it because we believe what our markets business does for us is integrate between our corporate customers, our investor customers.
By the way, the reduction in risk that we took forth at that time is one of the reasons why we have less required capital than people with the same array of business. All these decisions are consistent with the goal of building a great, sustainable, and growing company. One is less susceptible to issues in the crisis. Let's take a look at what we did by our numbers. First, we built a much stronger foundation. This is our balance sheet at the end of 2009. Its size was $2.3 trillion in assets. We've reduced it today to about $2.1 trillion, a reduction of $200 billion or 10%. This was done also where we replaced non-core assets with core assets. We go to the capital, which is the core of the banking system.
You can see here at the end of 2009, our tangible common equity ratio was 5%. Today it stands at 7.5%, up 50% in five years. In fact, our total common equity base is 10% of our assets base. When you go to the other thing that affects people in times of crisis is your liquidity. In 2009, our liquidity was around $214 billion. That's cash on hand to take care of whatever happens on a given day. Now it's up to $480 billion. That's nearly two and a half times. By the way, we comply with the rules that are going to apply to our company in two years. We also reduced risk in the company, whether trading, credit, or operating risk. To give you an example of that, you can look at our credit quality.
These were our charge-offs for the calendar year 2009. Today's charge-offs are the lowest they've been in a decade. They're down by a factor of 90%. The key here is to recognize how we did this. We didn't do it just by shutting down businesses as times got better. We did it by changing and reordering our customer selection model. For example, in our credit card business. During this period of time, we've grown our credit card originations from two million a year in 2010 to four and a half million in 2014. We did this while reducing charge-offs and improving credit quality. We had to work on our expenses, and we've done a lot of work to improve the way we operate. In 2010, we had a total expense base of $83 billion. $70 billion in expenses operating base.
When we looked during the year 2010, we knew we had to take action. First, we had to keep investing in our business because we couldn't stop investing for the future. Second, we had to deal with building the capacity to handle the last vestiges of mortgage crisis. Third, we had to continue to integrate our company to bring the systems together from all the mergers and acquisitions leading up to the crisis. The fourth, the expense just simply had to come down because the economy was predicted to be more slowly recovering than people thought. In the fall of 2011, we started New BAC, and you can see here we had about $77 billion in costs that year. The LAS costs we had, the bad assets mortgage servicing costs, were still climbing at that time.
We said we were going to do New BAC, and we committed to exceeding $8 billion of annualized savings. Last year we completed it. Here you can see the costs over the ensuing four years or three years. If you look at it, they move around a lot. What that's driven is largely by the litigation charges in the quarter and obscures the progress made on the core operating costs. Here's a view of just our operating expenses. As you can see here, the expenses have come down $13 billion or 18% since 2011. In fact, operating expenses have declined for 17 straight quarters in our company. Even with that work, we continue to push ahead. In the first quarter of this year, operating expenses were down 6% from last year, and our employee count was down 19.8% from a year ago also.
Seventh straight quarter. Where do we continue to go next? Well, we continue to work with a program we call Simplify and Improve to continue to make our company more efficient and more effective so we can not only bring the expenses in line where they should be, but also to create money for investments. How have your shares performed during those times? If you look here, in 2011, we struggled. The share price struggled against the peers and relevant benchmarks. The reason why is we had litigation with still an issue around this company. Liquidity, capital, and those things were swirling around our stock. Since we stabilized the company, you can see we started to outperform the industry and the various indexes. We have one job, which is continue to drive the share price.
This year we started off a little slow, a year ago to now, we're up about 11%. We'll continue to drive forward. When you move to the other way to measure the value in our company, one of the things we look at is a thing called tangible book value per share. That's your hard equity over the number of shares. When you look at that across the last five years, you can see it's risen. Each year, your investment, your hard asset investment in our company has grown, even while we've returned capital of about $8 billion. Our goal is to continue to drive that tangible book value per share because that's one of the key investment standards we have. Achieving this growth was difficult because we were absorbing a lot of charges in the crisis at that same time.
We had $84 billion in charge-offs during this period of time. Those charge-offs were in credit cards and home equity, mortgages, and other loan areas. We had $36 billion in litigation expense to pay the settlements and other matters. We had $46 billion to help collect and modify and amend the mortgages of the borrowers that we helped through the crisis. We had $28 billion in representation and warranty expense to put back risk in mortgages. When you add that all up, $200 billion, $12 a share. Yet during that entire time, we continued to drive the investment in the company up. The good news is that these are behind us, and as we look forward, you can see more of this stuff fall to the bottom line. We go to the revenue side and how we're doing on revenue.
We've been focused on building this company's revenue base the right way. The term we use called responsible growth. We have to grow, no excuses, but we have to do it the right way. Right customers, right risks. We've reduced exposures involved with consumer unsecured credit businesses. We changed our market position, as I described earlier. We've also shifted to a more sustainable revenue stream, less reliant on one-time items. You can see here, and it's adjusted for rate marks as interest rate movements. You can see the revenue has danced. That's reported revenue, you can see adjusted revenue. The way we think about it is how much risk is there to get that revenue. What we've done for here is just taken a revenue charge-off, the consumer charge-off driving that across a period of time.
We've got a lot of work to do to continue to drive the revenue growth in this company. As you can see, by taking down the risk, we have a much higher quality revenue stream today than we did five years ago. It's higher quality and more sustainable, and we can grow it through the recovery even if we hit not the best of times to hit. That will serve you better in the long run. Let me back up a little bit and talk about a quick overview of our industry and what's going on. Today, not only is our company more simple, less complex, bigger capital, more liquidity, but our whole industry is. Despite the progress we've made, there are always discussions that go on about the banking industry. Are we more risky than we were before the crisis? Have we gotten bigger?
Are we trying to repeal the legislation that changed the terms of which we operate? Believe me, that just isn't the case. First, size doesn't necessarily mean more risk because we've taken a lot of steps to simplify, narrow to operations, both geographically and scope. Since the crisis, capital has doubled in our industry and doubled in our company thoroughly. Every year we participate in stress tests. What those stress tests tell all of us, that we can go through a very severe situation and basically have more capital than we entered the last crisis, even when we continue to pay dividends and buy back stock. When you think about Dodd-Frank and the question about what does that stand for and how our industry feels about it, we want to get Dodd-Frank right, isn't it? Because we want it to work.
The goal of the regulation is to strengthen our industry and protect the customers and clients we serve. We believe that's an absolutely good thing. Simply put, you as shareholders, and we are as management, are absolutely self-interested in the outcome to have a strong financial service. Why? First, it's good for our economy. It helps growth occur both in the U.S. and around the world. Second, this is a very straightforward point. When a bank fails in the U.S., the FDIC cleans it up. The FDIC assesses a banking system to keep the FDIC funds stable. Inherently, we all pay the cost if it went down. It's our interest to have a strong system, both from a pure economic interest and also from a self. None of us want other people to fail. None of us want taxpayer bail.
The last thing gets lost in discussion is why are we big? Why are the large banks big? It's to serve our companies and customers. We serve small, medium-sized companies, that in the world that they face today, they have to be global and understand the global economy to access the capital markets and access the things that they never thought about a couple of decades ago, and big companies can bring them. The companies are already large, the large corporate clients around the world. We have to be able to serve them and help them raise capital throughout their market, and we can do that. That's where the company stands today, but that's also where our industry stands today. Lots of hard work to simplify, lots of hard work to build capital, lots of hard work to get risk out of the industry.
That brings me to the third place of what's the future of Bank of America. We started where we started, and now we can see where we are today. We have a company that we have positioned to be customer-focused and is growing its core business line. We have the lion's share of the legacy issues behind us in keeping a track and a tight rein on the cost structure. We have a strong financial condition, whether it's by capital, liquidity, or the other measures. We continue to weather a slow U.S. economic recovery, the slowest on record, and a low interest rate relatively. We still have work to do. We fully admit that, to get it back to where it should be. Even as we see that the earnings power continues to come more evident every day.
What have we done to grow and position the company? We built a simple operating. We talked to a lot of people and make it clear that we serve three types of customers, people, companies, and investors. We report them through five operating P&Ls as we speak here. How do we go to market? We go to market at 8 businesses. Each of these businesses has very strong positions, positioned near the top in their businesses, and we continue to leverage those capabilities to grow. Let's first look at our consumer franchise. We believe we have the best consumer franchise in the country. We serve 1 in 2 households. We have the number 1 footprint for the most efficient deposit-gathering franchise relative to our peers.
We have a number one online and mobile banking platform with 30 million computer banking customers and 17 million mobile banking customers growing every day. Now, as more customers want to transact that way, we continue to reshape our physical branches to make that happen. But importantly, our branches are critical to what we do, and we keep investing in sales force in those branches at the same time. Just over the last 12 months, we added 500 financial advisors and small business bankers, and many, many more personal bankers in these banks. We're making good progress on the client activity and generating good deposit balances. Our core deposits are growing. We're the number one home equity servicer, up three times over the last several years. We're number two in direct-to-consumer mortgage, number one in investment asset growth in Merrill Edge.
Importantly for you as shareholders, this consumer business is much more profitable than that. In 2014, it earned $6 billion after tax and returned 20% of ROE. When we go to our wealth management business, we have the two best brands in the business, Merrill Lynch and U.S. Trust. Number one in market position across assets, deposits, and loans, and number one in a Barron's Top 1,200 Financial Advisors. 2014 was another record for you as shareholders for our asset management fees, our strong client market flows, and increased loan balances. This business earned $3 billion after tax, returning a capital of 25%. We see the power of connecting this together for our company. The simple example is 40% of all the clients Merrill Lynch got last year, the new clients, came from other parts of our franchise referring it.
We continue to add more people here, more financial advisors to serve our clients. We've added over 120 so far this year, and we'll continue to add. If we go to our corporate business, our Global Banking business, we serve companies from small businesses to the largest companies in the world. We are one of the largest lenders to middle-market and small business companies, with $150 billion in outstanding commercial loans. We have a top-tier investment bank. In 2014, we were number two in investment bank fees in the world. As more companies continue to operate globally, the value of this model is to integrate our capabilities, both domestic and international, in markets and lending. Whether that's for cash management, for trade financing, to hedge your currency risk, local currencies around the world. We do this by helping these companies achieve their goals.
We continue to invest in this business, too. This year, we're up about 4% so far in commercial bankers covering the middle-market clients. By the end of the year, we expect to be up 15%. It's a great stable earnings business for us. In 2014, your Global Banking business earned $5.8 billion after tax and had a 17% return on capital. We go to our markets business. It's one of the top-tier platforms in the world. This business helps our investor clients, sovereign wealth funds, asset management firms invest in companies and markets to grow. These activities drive the real economy around the world and in the United States, and we provide these clients great expertise. The research team has been number one ranked in the world four years in a row. When we think about our position here, that strong success drives financial success.
$3 billion and a return to cost of capital [inaudible]. As you look at the model, we believe an integrated model leads to significant benefits for us as shareholders. The reason why we think this model makes sense is because it provides both client benefits and shareholder benefits. Our client benefits is because they can efficiently access capital and a range of services unprecedented in our industry. Mid-sized companies can, as they globalize, as I said before, can use our geographic and research expertise around the world. Clients also benefit with access to broad delivery networks and full banking capabilities. Nearly half of our wealth management companies use our banking services and branches in a given period of time. Another example is in our retirement services business.
We've gone number 10 to number 8 in the business the last few years and continue to drive it because we have companies that need retirement planning. When you get to the shareholder side, you as shareholders also benefit. You benefit from the diversification and earnings stream. You benefit from the expense synergy that we share for the infrastructure. You benefit by the investment banking and capital markets activity that funding advances compared to operating standpoint. When people talk about breaking this up, they forget something. If we broke it up, we'd lose $13 billion in markets revenue a year. We'd lose $6 billion in investment banking revenue a year. We'd lose all the market access and expertise and geographic expertise we have to serve our customers and clients.
Even if you broke it up, though, each of the entities left over would still be a system and still have the capital pressures. The other way we've tried to extract the benefits for you as shareholders from this great franchise is deliver one company. Here you can see what a lot of people talk about, what we make happen and don't leave to chance. We drive an integrated model with a market presence. Charles Bowman here in Charlotte that drives an integrated model across all our businesses that generate referral fees back. We have 90 markets. We measure it every month. We score it, and we drive it forward. As you can see here, you can see some of the success. We're doing all we can for every customer. That's the question we ask, and we won't be satisfied till we answer this fully.
From nearly 300,000 referrals, we're on a pace this year to do $5 million, and we close 20% of those within a short period of time, and the revenue continues to build from it. We believe this is a competitive advantage, and we're driving. If you look at the earnings stream, you can look at the business performance for 2014. We earned $4.8 billion. What drove that? On the far right of the slide, you can see that the losses from the mortgage business due to litigation. If you take that away, the core of the business earned about $18 billion, and that's our path. Eliminate what's on the right-hand side of the page, and let the left-hand side keep coming through. As LAS costs continue to come out, we continue to make good progress. Let's step back and think about our earnings recovery.
You can see here the $18 billion before LAS in 2014. As those hits from LAS have subsided in the recent quarters, you can see the recovery. Let's go through that stair-step. In 2014, in the second quarter of 2014, our company earned $0.19 a share. In the third quarter, we lost $0.05 because we had the Justice Department settlement. In the fourth quarter of 2014, we earned $0.25. In the first quarter this year, we earned $0.27. If you look at what the Street expects from the first quarter, $0.36. If you take that first quarter and adjust out a couple items, which I'll show you in a second, which don't recur in other quarters, it's about $0.36. We're on our way to get there.
This is a progression we're after as we move the costs of the crisis behind us and let the rest of the earnings come through. We also focus on a goal of having a 100 basis point return on assets over the near term. In the first quarter, you can see here we had a few adjustments, interest rate adjustments, and a compensation expense we only incur once a year. Adjust for that, we go from 60-80 basis points, halfway to the [100 basis points]. If you further adjust for litigation that's still outsized in the first quarter and the cost of collecting bad mortgages, which will continue to come down. We're at 90 basis points. How do we get to 100 basis points? It's just hard work. More core business, more expense efficiency, and with rising rates and an improving economy, we should benefit.
Last, I want to talk about the most important thing, which is what our 220,000 teammates do for us every day as caregivers. They go to work to improve our clients and improve our communities, and they do it every day. Through our corporate social responsibility network, we continue to focus on improving those communities and as core to the business strategy as we have. This year, we have a separate governance committee, and [inaudible] and my teammate run to help make sure these priorities stay front and center. One of the ways we support our communities is by a program called Better Money Habits. That is, Better Money Habits is a proprietary program we do with Khan Academy. 10 million people have used these tools so far. It's about a year into it.
It's the work we've done with the military through home donations, job skills training, and hiring. Last year, we announced the goal to hire 10,000 veterans over the five years, including this year. That builds on the 7,000 we hired in the last five years. In a tribute to the service these veterans had for our country, we've donated nearly 2,000 homes over the last few years to them as they return from service. It's the work we do on your behalf on the environment. We have a $70 billion environmental commitment, and we're driving that forward. It's the work we do in our charitable and volunteer work. Something that makes me very proud. Thanks, guys. Last month, we, like everyone else, celebrated Global Service Month. What we celebrate at Bank of America was 2 million hours in 2014 of service given to communities.
Two million hours by our teams. Right now, we have a special partnership, I'm going to ask all of your help. In your packet, there's a special partnership with the Special Olympics and the Unified Relay, which starts relatively soon. Pull it out, come help us raise some money for a great cause. As you think about 2015 beyond, let's review what we covered. We worked hard to change the company. We have a strong foundation. We have a strategy that's focused solely on the customers we serve, and that strategy is driving growth. We have a dedicated team that goes to work every day on behalf of the clients and the community, and all that continues to drive value to the shareholders. As we look forward, it comes down to three things.
Drive responsible growth that is real, growth that's within our risk parameters, growth to the right customers, it will hold good in times of stress. Second, continue to simplify the cost structure of the company and continue to bring that cost structure down. Third, continue to increase share return to you. We think this company has extremely bright future, and you can see why we think that. Thank you for your support. Let's move to the rest of the meeting. I'd like to ask Ross to bring the secretary's report. Ross?
Thank you, Brian. Notice of today's meeting and the related proxy statement or notice of internet availability of these materials were mailed beginning March 26, 2015, to all stockholders of record as of March 11, 2015. Proof of the mailing will be filed with the record of this meeting. Rebecca Fencer of Computershare Trust Company has been appointed Inspector of Election. She has advised me that holders of shares representing at least 81% of the shares entitled to vote are present in person or represented by proxy, which constitutes a quorum.
Thank you, Ross. I declare the quorum is present and this meeting is officially convened. We are now ready to consider the seven items up for the stockholder vote as listed in the proxy statement. Most of you have submitted your proxy to vote on these matters, you don't need to do that again unless you want to change your vote. If you want a ballot to cast your vote, please raise your hand now. There's a ballot over here. Anywhere else? We got a ballot here. There's one here in the front too. Sorry. One back there. Let's get the ballots out. As we're doing that, I'd like to recognize the Bank of America teammates who are serving as proxy and ask them to stand.
Sheri Bronstein, our Senior Vice President and Human Resources Executive, that does a great job for us covering our global banking and markets business, and David Riley, our Chief Technology Officer, who helps keep our company running every day and does a great job for us. Thank you for serving for us, Sheri and David. As Ross told you have copies of the rules of the meeting. Let me remind you of a couple of things. Stockholders presenting proposals are going to have four minutes to discuss those proposals. Stockholders wishing to comment on those proposals will be limited to two minutes per stockholder. When your time is up, you're going to hear a chime, and that'll be your signal that the time is expired. Please address your comments or questions to me, I'll either answer or ask one of my colleagues to respond.
We're going to have two sessions where we take shareholder comments. The first session is on the proposals. If you have a concern on a proposal, we'll hear from that in the first session. If it's about the company generally or about issues related to your accounts and stuff, please wait for the second session. With that, I'll now present the items for stockholder consideration. The management proposals are as follows. Proposal number one, to elect our director nominee. Proposal number two, to adopt an advisory vote to approve executive compensation. Proposal number three, to ratify the appointment of PricewaterhouseCoopers. Proposal number four, to approve the amendment and restatement of the Bank of America Corporation 2003 Key Associate Stock Plan. Now let's move to the stockholder proposals that are included in our proxy statement. Mr. Davitt, just hold on one second.
Let's get all the other proposals in, then you can make your comments. We'll get it in one second, okay? Thank you. The proposal related to lobbying was withdrawn by the proponent and will not be voted on today. The other three stockholder proposals will now be presented. The first stockholder proposal relates to climate change and was submitted by the Sisters of the Holy Names of Jesus and Mary. Gabriel Toomey is here to present the proposal on behalf of the Sisters of the Holy Names of Jesus and Mary. Mr. Toomey. We'll have comments about all the proposals in a minute. We're just going to put the other three into the record. Yes, it's all the comments of all the seven proposals. Thank you. Mr. Thoumi. Mr. Thoumi, okay. You ready?
Yes.
There you go.
Good morning, Mr. Moynihan, members of the board, and shareholders. I'm Gabriel Toomey, Senior Sustainability Analyst at Calvert Investments. I co-filer Proposal Five, which I'm here to move on behalf of the primary filer, the Sisters of the Holy Names of Jesus and Mary, U.S. Ontario Province, and 11 other co-filers. I'm both a chartered financial analyst and a certified ecologist. At Calvert Investments, I cover carbon asset risk for our investments on behalf of our institutional investors. The resolution requests that the board of directors report to shareholders the bank's assessments of the greenhouse gas emissions resulting from its financing portfolio and its exposure to climate change risk in its lending, investing, and financing activities, also known as financed emissions.
Like other financial institutions, Bank of America contributes to climate change through the financed emissions, which dwarf the bank's other climate change impacts and expose it to significant financial reputational risks. For example, in 2014, Bank of America reported to the Carbon Disclosure Project that reputational risk could arise if we are not developing the appropriate balance of carbon and low carbon-reliant customers for sources of energy in our business mix. Through Bank of America's environmental financial commitments, it has demonstrated that it's proactively scaling up financing for low carbon, environmentally friendly business opportunities. However, climate change creates both opportunities and risks for banks. Through its corporate lending underwriting businesses, Bank of America remains highly exposed to both reputational and financial risk from carbon-intensive clients in the fossil fuel and electric power sectors.
The resolution filers are concerned that a lack of strategic response to climate change is undermining the bank's reputation and exposing shareholders to unnecessary risks associated with financing carbon-intensive industries. Further, as members of the global society, we take seriously the Intergovernmental Panel on Climate Change's 2014 warning how extreme climate change is likely to disrupt the global economy and pose other systematic social risks, especially for people in the world's poorest countries.
Bank of America concludes its statement of opposition as follows: "Our board believes that management is best suited to address the climate change impact by supporting key environmental initiatives, continuing to develop innovative solutions for addressing climate change, and regularly communicating our progress to our shareholders." Last year's annual meeting, one-fourth of Bank of America shareholders gave the board a clear and strong message: You're not giving us sufficient information to assess how the bank is managing its exposure to climate change and its financing portfolios. Globally, as eyes turn to the Paris Climate Change Conference later this fall in 2015 and the potential for a new global climate policy framework, we call on Bank of America to be a leader in the financial industry and to assess and report on its exposure to climate risk in a transparent and comprehensive manner.
Finally, on a personal note, I have led Calvert's ability to address and report internally on greenhouse gas emissions from our own asset management portfolios. In this role, we have assessed our fossil fuel reserves exposure and our greenhouse gas emissions, our investments. As an asset manager with a little more than 180 employees, not quite 220,000 if we can do this, I'm sure you can do it too. Thank you very much.
Thank you. Thank you, Mr. Thoumi. We now have two proposals that are going to be presented by Bart Naylor. One related to the written consent on behalf of Mr. Steiner and his own proposal related to stockholder value. Mr. Naylor.
Thank you, Mr. Chairman. My name is Bart Naylor. I'm here to advance the proposal as provided in your proxy statement. I believe this is good corporate governance that is endorsed by leading corporate governance authorities. I urge the board to reconsider its position and adopt it. Thank you.
We'll now accept questions or comments on these. Oh, you need the second one too, sir. The shareholder value creation proposal eight.
Yes. Mr. Chairman, I am currently the financial policy advocate for Public Citizen, where I'm roughly one of about 12 people in Washington that is on the opposite side of some of your, and I should say our advocates. Formerly, I was the chief of investigations for the U.S. Senate Committee on Banking, Housing, and Urban Affairs at the time when we were trying to rationalize the financial services sector. Mr. Chairman, you have proposed that under the current trajectory of your implementation of the strategy, Bank of America's on target to make $0.36 a share in 2030. At a price earnings multiple of something like 20, you're talking about a share price that's still well below the $50 this company traded at before the financial crisis.
You have said in response to my proposal to study the breakup, that you have in fact analyzed some of the potentials for what the company would be like if it did not have these sectors or these businesses in conjunction. I would say that my proposal asks for a rigorous study and dismissing this with what I would call 20 or 30 seconds is inappropriate given that we do have a grade that is administered to your company and that is the share price. That share price is a fourth or a fifth of what it was before you put this major bank together. You say that you are serving customers, as you well know, J.D. Power ranks you last in the markets where you're the biggest. You say that it's necessary to be big because that's necessary to serve big customers.
Well, you well know that when you engage in a large loan, it's in a syndicate. You saw that when Heinz was sold to Berkshire Hathaway, it was not done with the help of a mega bank, but was helped with a boutique firm. I think it's inaccurate. Now, at the core of this resolution is the observation that you are literally too big to manage. You have more than 1,000 affiliates. You misstated your regulatory capital by $4 billion for several years. You've had hundreds of operating statements. You engaged in fraud. I happen to be Episcopalian, I'm charmed to see that you call that litigation expense.
When Attorney General Holder testified before Senator Grassley, he confided that we cannot administer real penalties against banks because it would cause financial tsunamis, which unfortunately invites a new moral hazard in addition to too big to fail or too big to jail. That means the bankers who are well compensated understand that if they engage in fraud or reckless activity, they're actually not going to be punished. Mr. Chairman, I ask not specifically that the bank be broken up, though I think shareholders would be serviced by that, but that you engage in a rigorous study, as some other banks have done, to see what would happen, and report that. As you know, there's a case example just in the last month where GE announced the spin-off of GE Capital, and the shareholders were rewarded by a 10% increase.
I think the trajectory that you outline is one that will not return us to the levels before the crash, and I ask shareholders to support this. This vote will win far less than the majority. I have to observe that among the largest shareholders are the other mega banks. Among the largest shareholders are firms that are conflicted by the fact that their vote is going to be seen in a few months when they report it.
Thank you. We'll now accept questions or comments on the seven proposals. Please hold other questions of the general nature to the end of the meeting. A few housekeeping questions here. You do not need to form a line to ask questions. Simply raise your numbered card that's in your packet. Once I recognize you can move up the aisle, and a teammate will be holding a microphone. Please then state your name and the proposal about which you want to speak. Please limit your remarks to two minutes. The chime's going to sound and remind you when the time is up. With that, are there any questions or comments on the seven items? Number 260.
Yes, sir. As you know, on receipt of the 2014 annual report, I contacted the audit committee of the board of directors to arrange for a meeting in advance of this meeting, as I was disturbed with the obvious mischief of management in that report and outright distortion of the reporting and misleading information contained therein. I met last evening with Mrs. Allen, and sad to say, there was nothing forthcoming out of four pages of detail requested. As you know, the shareholders depend upon independent directors, and I would have to report that the board has been derelict in their duty for many years, stemming back to years of exchange, one of which I'll read briefly here.
In response to my questions about compliance with Fannie Mae's guidelines, Ken Lewis said in 2005 at the annual meeting, "And the committee has looked into every single issue and have looked at them in depth and have what we feel that we are complying with all of the issues and would arise around Fannie Mae and Freddie Mac compliance." It's obvious since that day, The Motley Fool printed an article last week that said it has cost shareholders $91 billion in equity at this bank. I, for one, would demand this information from the board. I'd like to have their responses.
Thank you. Thank you, Mr. Davitt. I'm glad you had a chance to meet with the chair of the audit committee yesterday. Number 309, if you could state which proposal you're speaking to in this, please have your question on proposal. Thank you. Your name and which proposal you're speaking to, please.
I have tried to get them to clarify. If I want to speak on multiple ones, I each time come up here and speak on each one.
Yes. We've got to get a chance for other people to speak.
Okay. Well, I'm going to be speaking on all of them. My comment. Can we start this from the beginning since I oppose any member of this board of directors. I do so because I do not believe that you are serving our best interest. When the price of the stock was $55 a share and the dividend was $250, you get up here and say how great we're doing. When it went down to $3, it's now, what, $14? The dividend rate is $0.02 a share or $0.03 a share. You were an official at the original thing when Ken Lewis got up here and lied to us, and the stock plummeted. It has not gone back up.
I don't know how you can say we're doing good when the stock price is still tanked down in the bottom, and it's cost people dividend income and their assets. Cost me almost a million and a half dollars. I do not vote for any member of this board of directors. I specifically don't vote for you. I think you are part of the problem, and it's time for you to retire.
Thank you for your comment. Next, 317. Which proposal are you speaking on?
Proposal one. I'm Mike Mayo. I own stock. I'm also an analyst on Wall Street. I'm against the four members of the Governance Committee. I want to agree with you, Brian, with your comment. There are positives here. Better credit, better capital, a stronger, more resilient balance sheet. There's three issues with targets, scorecard, and process. The targets, there's no timeframe for any financial target. There's no target if rates don't increase, and there's no way to hold management accountable to specific financial targets. Second, with regard to the scorecard, last year, there were some bad items. Missed target, $4 billion accounting error, Fed stress test issue, and a 2% ROE. In fact, the ROE has not exceeded 5% for the last five years, and there's no mention of that in the annual report or the proxy or even today.
You mentioned the New BAC expense saving, without a context of the revenue declines. I appreciate you bringing that up today, but that's out of step with money center peers that use the efficiency rate. Third, the process. The CEO was promoted, they ignored the bad news, and it's not clear why the board okayed the promotion without checking with shareholders first. Again, this relates to the Governance Committee. It's not clear that they're holding management sufficiently accountable given the past, where some bad items were ignored, and the future, it's not clear which metrics they're going to use to hold management accountable. The last thing I'd say about governance, I was hoping we'd get some questions and answers in this part of the meeting. Last week, Citigroup allowed questions and answers during this part of the meeting.
That, to me, one more example of governance not being in sync with the peers. I see the governance of Bank of America out of step with the money center peers, and I will come back for the other proposals. Thank you.
Thank you. Any other questions on the seven proposals? Number 259, please.
My comment is with regards to the before breaking out of the company. I thought it was Proposal A that I was mentioning. I didn't remember.
We had one drop out. It is number eight in your proxy.
Okay. My comment is, there are probably some times when a company, because it diverged and businesses are unrelated, it makes sense to break it out. You laid out a lot of reasons why Bank of America should continue. If you break up almost any company, one thing that will happen is, over time, you're going to have separate corporations, which mean more overhead, more expense. I personally oppose that.
Thank you. Any other comments on a proposal? 316 here, sir.
Mr. Moynihan and board. I'm curious, given the extreme weather in California and the current drought, how much that is impacting your business from a climate perspective. If you've done any financial analysis looking at water risk in the U.S. going forward in the market where you do business. Obviously, we've seen greater water stress, you can't model it linearly. Thank you.
We did. In fact, we just discussed that yesterday, the drought in California. In fact, it was part of our . I won't, because we did discuss it. Other comments, 266, please. Please state which proposal you're speaking to, and then.
The election of the board. Richard Davitt. Last evening, my meeting with Mrs. Allen. I have a question for her, specifically, Janna Litzie, the Chief of Litigation, attended that meeting and did at least 50% of the talking there. I'd like to know who Ms. Litzie was representing, and I'd like to hear that from Mrs. Allen.
It's an employee of the company. She's a lawyer that works for us.
Well, we're talking about corporate governance issues. As you know, in the SEC settlement in The People of New York, the bank entered into stipulated judgment that called for independent counsel to ensure the transparency involved with issues like mischief of management. In advance of my meeting, I invited Mr. Cheek to attend that meeting. Why was he not there?
I think you have to meet with Sharon Allen, the head of audit committee, with this. Next comment, please. 309.
This is on item 2. Just for the record, sir, I would not throw this simply because I don't have the ability, and I wouldn't do it anyhow because it'd be a waste of my time. I think I should be able to hold it. Compensation. You claim that the expenses have been lowered, but when they combined your office to both of them, in contrast to the proposal and the vote of the shareholders not to do so, without giving the shareholders, at this point, a chance to vote on that is wrong. Your compensation or any compensation for the executive compensation should be reduced by whatever percentage the share price of the stock and the price of the dividend was, the difference between the $50 or $55 or $2.50 to what it is now.
None of you should be earning or getting any raises until you can make the stock back up to where, or even close to where it is, and as the dividend rate goes from a paltry penny or two to back up to the $2 or some cents. Again, you've cost me a significant amount of income. I'm sure that there are people here or aren't here who lost extensive prices and assets because of the mismanagement that this company did and the lies by Mr. Lewis, and I believe you were employed at that time. That means that you must have approved them because you never spoke out against any of it.
Again, I vote for any increase or any compensation to any member of the executive committee until what time the stock has gone up to a minimum of 50% of what it was before you all lied to us about the merger.
Thank you. Other comments or questions specifically on any of the proposals? 317.
Proposal 2, compensation. It's Mike Mayo. The key issue is the process or the transparency. First, the scorecard, it's not clear what the scorecard is for compensation. Again, the bad items weren't mentioned. The expense savings were mentioned without any mention of a revenue decline. The second issue is in the compensation section of the proxy where it says executives were paid based on $4 million business referrals. Clearly, business referrals are great. It just seems out of context without also mentioning customer satisfaction and suitability. The third thing is the Performance Stock Units. The PSUs go in the money at a lowly 50 basis points when you identified your ROA target at 100 basis points. Again, I was hoping to have a give and take during this part of the session. Hopefully, I can during the general Q&A. Thank you.
We'll get to that. You want to ask a question, Mike? Any other proposal questions? 309.
My first question is, how long has this company that's been your independent public accounting firm been employed by the bank? What is the name of that company?
Well, the name is, it's in the proxy. PricewaterhouseCoopers.
Sorry, what?
PricewaterhouseCoopers.
Okay.
Shareholders are approving.
How long have they been employed by this company?
How long have they been our auditor? Many years.
Anyone answer that question?
Many years.
Many years. In other words, the people who keep claiming that this is doing great and great were all part of the process back in 2008 and 2009 when the price of the stock tanked from around the $55 share to $3 share. They were all part of that. Don't you think it's time, and I'd like you to respond, to find someone who is truly independent and not someone I was going to say flunky, but that may not be appropriate comment at this time, but who sits here and says, "Yes, everything's fine, everything's fine, everything's fine," and in fact, it isn't. I don't think they should be approved. I think you need to find someone who might be truly independent and not in your back pocket.
Well, I think if you think about the approval rates by your fellow shareholders over the last several years, and a little later we'll find out when we post the election results, their approval rate this year, I think it's been extremely strong. Next comment. 260.
Richard Davitt. We heard several times in this morning's presentation about we're putting this behind us, to paraphrase a little. You previously referred to it as the mortgage stuff behind. As you know, the vast majority of your mortgages go on a daily basis to one of the government-sponsored enterprises. That business model has been called by every credible scholar fatally flawed. How can you paint a rosy picture with respect to newly minted mortgages? If I understand the statement correctly, $56 billion last year. What has been done to repair that? The fact that you are originating most of the mortgages today. Are we to be consoled with that? Are shareholders to be consoled with that? George Burroughs, I believe, said it best. All of the players in the GSE business model are hopelessly conflicted. How do you propose on resolving that conflict?
Where is the board in all this? Watching the mischief of management. Several years ago, Ken Lewis referred to it, "We do it for the cash flow." Is that what's happening here? The cash flow in a mortgage, a fatally flawed mortgage business? That's my question.
Thank you for your comment on proposal 317.
Proposal eight, requiring an analysis of the breakup. First, I just want to back up. Brian, you inherited a mess when you became CEO. The balance sheet was weak. You are recovering from the financial crisis. You have done a lot of good in strengthening and creating a more resilient franchise. As it relates to this proposal, some of the issues predate you, and just to keep the context straight, this company has not generated returns above its cost of capital in about a decade. The stock price was at this level far back as September 1995. That is when Hugh McColl was buying BankSouth and Florida NationsBank.
Also, since it is not clear what the financial targets are for this firm, since there is no specific timeframe for any financial target looking ahead, and I appreciate the 1% ROA, but we still do not have a timeframe when you are committing to that and ideally have compensation linked that. Given all these considerations, my thought is simply, why not simply include an analysis of the trade-off of your business model? That is all that this proposal number eight requires. I am holding in my hand a couple slides from JPMorgan's investor day in February, and they give some slides about the trade-off of their business model. Once again, it seems as though Bank of America is a little bit out of step with regard to the transparency in the process, and that is the main reason why I support proposal eight. Thank you.
Any other comments on the proposal? Just why do not we conclude the proposal Q&A, and then we will get to broader Q&A in a few minutes. I now declare the polls open. If you have a ballot, please raise your hand, and we will collect them. Okay. Fair enough. Number 309. If you have your ballots ready, anybody voted, please give the ballot to the people collecting so we can. Okay.
Am I? May I ask a question? Has there been any comment on number four? I did not think so. I live in an area where the dust is so great it permeates the houses. When it rains, the mud still goes into the creek and into the Potomac and into the bay. Anything that would help with the environment, I would support. Anything you do against the environment, I would condemn. We are raising a generation of people who will not be able to breathe in the air. They have difficulty now. You get people who try to go out and go jogging or walking in our neighborhood, and they have to wear a mask because the dense, the dust, and the pollution coming out. You seem to think that doing anything to protect the climate is counterproductive. You need to support any effort to protect the environment.
You have an obligation to it, not only to past generations, but the future generations and the generations who will live in this country in 10, 20, 30, 40 years. At that point, you probably won't have to worry about me because it's. Or hopefully you. Anything that has to do with climate change, you have an obligation to be a forefront in it and not dragging your feet.
Well, when I go to visit my father, who's 30 years plus my age, I hope I'm alive at his age. We obviously take very seriously our environmental matters. We talked about the program for $70 billion of work earlier, I think we can touch on that later on, too. The polls are now closed, and this concludes the official business of today's meeting. Preliminary results of the voting are available. Ross, could you please report the preliminary results?
Our Inspector of Election reports the following preliminary results. All of the management proposals received the required majority support and have been approved. For these proposals, all 13 director nominees have been duly elected to the board of directors. The advisory vote on executive compensation has been approved with approximately 94% of votes cast in favor. The appointment of PricewaterhouseCoopers has been ratified, and the amendment and restatement of the Bank of America Corporation 2003 Key Associate Stock Plan has been approved. None of the stockholder proposals received the required majority support. Final voting results will be reported in a Form 8-K filing with the Securities and Exchange Commission within four days of today's meeting.
With the announcement of the preliminary voting results, there's no other official business to come before the meeting, the meeting is adjourned, and we're going to move to the general Q&A session. Now that we've completed the official meeting, please remember the guidelines we discussed at the beginning of the meeting are still in effect. Raise your numbered card. I'll recognize you. Move to the aisle. You can ask your question. We'll have the Bank of America member who will be holding the microphone. You'll have two minutes, and the time will go off. For the benefit of the other shareholders, let's remind you that if you have a personal financial matter to discuss, we're happy to discuss it with you. We have teammates here who will take care of that immediately for you. Let's start with any questions. 310.
Good morning. My name is Amanda Starbuck. I am with RAN, the Rainforest Action Network, and I came out here from my home state in California, where we are enduring our fourth consecutive year of drought. This is just one example of extreme weather and climate change that is impacting communities across the nation and around the world. Just this week, the International Energy Agency reported that we have only five years to take serious action if we are to avoid runaway climate change. It is the challenge of our generation to transition from a fossil fuel-based economy to clean, renewable energy. In this context, I would like to thank the bank for this week announcing a significant shift to your coal mining policy. This policy represents a sea change, a commitment to reduce exposure to coal mining across the board.
It is a model that we would like to see other financial institutions follow. I would like to thank the bank's executive team, environment team, and members of the board for demonstrating leadership on the issue of coal mining finance. Please, will you say a few words about the policy and what it means for the bank's environmental commitment?
Sure. Thank you for your comments. As you referenced, we have continued to refine our coal policy, and I am going to have our teammate Andrew Pfeffer talk about that. To refresh what we talked about earlier, we have a $70 billion environmental program. If you were watching the screens earlier, we have created a billion-dollar catalytic environmental fund. We work with various organizations around the world to continue to address the issues of transition from fossil fuels to other means of power and electricity. That we have been asked for. The $70 billion program allows us to finance alternative fuels, allows us to help finance buildings, LEED buildings, and make those happen. All our branches will be LEED Platinum certified as we rebuild them. Our headquarters for the Merrill businesses in New York is LEED Platinum certified, and we continue to drive that.
Andrew wants to talk about the coal policy. Andrew.
Sure. Thanks, Brian. Thanks for giving me a few moments to talk about how the environment fits into our broad corporate social responsibility efforts. As Brian mentioned, it's a key pillar of our CSR program at the company. As you know, the world is in transition to a lower carbon economy, we're playing an important role in helping to accelerate the transition. Our financial commitment, as Brian mentioned, is one of the largest in the industry. We've made a $70 billion commitment, over the past seven years, we've raised or invested more than $39 billion toward this multi-year goal. Last year, we financed 8% of all solar or wind installations in the U.S. We're also creating innovative new vehicles to speed progress.
We issued the first ever green bond in late 2013, a $500 million green bond, to connect investors with projects that create a positive environmental impact. We were the number one advisor to green bond issuers in 2014. Our new catalytic finance initiative is designed to stimulate at least $10 billion of new investment into high-impact clean energy projects. As Brian mentioned, we're also reducing the environmental impact of our own operations. In just four years, we've lowered our greenhouse gas emissions by 26%, well beyond the UN IPCC recommendation. Working with partners like the UN's Sustainable Energy For All initiative and Stanford University's Global Climate and Energy Project, we committed more than $15 million in environmental philanthropy in 2014. With regard to coal, over the past several years, we've been gradually and consistently reducing our credit exposure to companies focused on coal mining.
Our new policy, which was posted on our website, reflects our decision to continue to reduce our credit exposure over time to the coal mining sector globally. Today, our renewable energy portfolio is more than three times as large as our coal extraction portfolio. The transition from a high carbon to low carbon energy economy will continue. At Bank of America, we'll continue to do our part to accelerate this transition for our customers, clients, and communities.
Thanks for answering. Other questions? Let's go to 319 here. Tom, just wait for the microphone, if you would, so we could all get a chance to hear you. Thanks.
I'm Tom Lockett. I have been a shareholder of this corporation for more than 40 years, beginning with American Trust Company. I didn't understand a great deal of what you said, I do understand that the shareholder in the pew at this company is basically getting nothing. You paid $0.05 quarterly for one or possibly two quarters in 2014. Wells Fargo paid $1.40 a share, and they plan to pay $1.50 in 2015. That's seven and a half times the dividend that's being paid by Bank of America. This is not fair to the Bank of America shareholders who sit in the pew. Your compensation of a million and a half is not objectionable to me. The idea of an $11.5 million stock bonus to you is foreign. I don't understand it. Traditionally, a bonus is given on the basis of performance and return to the owners.
The owners are not getting anything for their investment in you or in the company. I don't think that you or Montag or Thompson, Darnell, Lynch, or Boland are entitled to any bonus over and above your compensation. Until the company pays a respectable return to the shareholders, the bonuses should be eliminated.
Thank you for your comment, sir. We continue to push the dividend. Last year, we got approval to raise it from $0.01 to $0.05, the first time since back into the crisis, and we'll continue to pursue that. Last year, we earned a little over $4.5 billion or so after tax, and we paid out a significant amount of that. Dividends were $1 billion plus, and then the capital buyback was about almost $4 billion of that. We'll continue to push capital back to you. That's our goal, too. My whole net worth's in this company, and I get paid in stock. Where does my interest lie? With you. Next question, 306, please.
I want to talk about leadership. What I want to say, I'm Bruce Marks, the CEO of NACA. When I talk about leadership, I want to really commend Brian and his team, Andrew Pfeffer, and Terry Laughlin, and Anne Finucane, and Ron Sturzenegger, and others who have really set the leadership. Let's talk about the specifics. Bank of America, Brian, you've done something that's never been done in the mortgage industry before. You are out there eliminating predatory lending by doing two major initiatives. One is the Wealth Builder model of a 15-year mortgage, making that affordable for working people. Within seven years, people will have close to a 50% equity in their home. That is good lending that makes sense. It's never been done before.
In the city of Detroit, as was said in the Detroit Free Press, it says, "Mortgage program is key to Detroit's future." You have agreed, no one's ever done this before, to do 150% loan to value for working people in the city of Detroit. That makes sense. Working people will be able to, through your program and your mortgage with NACA, have a mortgage payment of less than $400 a month, that's much less than their rent. That's setting the standard, that's never been done before. That's true leadership. We really appreciate that. We want to stand up, and we want to give you something to recognize what we've never done before. If I can come forward for a second.
Yes. I'll come up here and get it from you.
I got to say. We've never done it. We are giving Brian and his team the [NACA curve] on its back. It says, "Predatory lenders beware." You can quote some predatory lending by doing the process, or you can do what Brian at Bank of America is doing by providing opportunities for people to get affordable mortgages. I just want to say, everybody, thank you, Brian. He deserves a big round of applause.
Thank you, Bruce. Thank you. Other comments? 313.
Good morning, Mr. Chairman. I'm happy to be here. My name is Denise Scott. I'm the Executive Vice President for the Local Initiatives Support Corporation, also known as LISC. We are the largest community development financial intermediary in the country. For the past 20 years, we've partnered with Bank of America to finance affordable housing, improve community space, and needed facilities throughout very needy communities across the country. Most recently, Bank of America and LISC partnered with the city of Detroit on an innovative program assisting homeowners in the city to repair their homes, improve neighborhood stability in markets where families are in desperate need of home repair. Through the bank's catalytic CDFI program, we have the flexibility to provide 0% loans to homeowners to make these repairs. That basically means that the homeowner will be paying back just what they borrow. This is truly a best practice in innovation.
Hundreds of families will be helped by this partnership with B of A. I stand here today and join my colleagues before me and say that we're really proud to be a partner with B of A, and proud to have worked with your team, with Andrew Pfeffer and the team. Thank you.
Thank you. Other questions? 314.
Thank you, Mr. Chairman. My name is Julian Martinez. I represent SER Jobs for Progress National, a national nonprofit community-based organization serving the economic needs of Hispanic Americans. We would like to take this opportunity to thank Bank of America for the commitment to the Latino community. From your diverse board of directors to your financial literacy programs in Nevada, Bank of America has proven yourselves to be leading corporate America in diversity, especially in serving the Latino community. Your selection of Monica Lozano to serve on your board of directors is especially significant. Not only does she have outstanding professional qualifications, but she has an intimate relationship with the Latino community. We appreciate your participation in the Hispanic Association on Corporate Responsibility's Corporate Inclusion Index. Bank of America has shown a positive increase in its ratings from 40 in 2009 to 75 in 2014.
As you know, the Hispanic population in the U.S. has increased to 54 million individuals. This means companies must harness the power of both the Hispanic consumer and Hispanic employee as a means of sustaining their competitive edge in an ever-changing economy. The continued underrepresentation of Hispanics in key positions throughout Corporate America means that companies are not leveraging this talent to its fullest potential. Corporate America needs to understand the work that must be done to increase the pipeline of Hispanics into the upper ranks of Corporate America and to further develop the Hispanic entrepreneur and middle class. It is truly a pleasure to see Bank of America leading the way. Thank you.
Thank you for your comments. We recognize the need and continue to work on it. How about 194?
Good morning, Mr. Moynihan. I'm Natalie Cook. I attended this meeting last year when I addressed you. One of my issues was the $0.01 dividend. I applaud the bank for increasing that to $0.05. I look forward to the continued growth. The second issue was the bank sending our jobs offshore, which you denied, but it's happening. It's called Project B. Your denial of this leads me to believe that you might be out of touch with the rank and file. This year, I'd like to speak for all the women that work at Bank of America and address the gender gap.
I don't really have a specific question. I challenge you as the CEO of Bank of America to take an honest look at the gender gap of your company and if women are only paid $0.78 for every $1 a man is paid. I challenge you to take a look and see what's happening with your company and exactly what the gender gap with equality is here. Take the next step forward by closing that gap. Mr. Moynihan, will you take this challenge?
Amanda, I remember you last year. Just to touch on your first point, we brought 4,500 consumer jobs that other companies had offshore, onshore in the last 12 months, and we continue to do that. The second thing I think is on the question about the gender gap and women's pay. Not only do we take the challenge, we've taken it every day, and I applaud you for raising it again in this setting, and hopefully you'll raise this over and over again in other settings. If you look at our Board of Directors, we have You want to stand? All the directors stand and turn around. I think you'll see that we have one of the higher percentages of women board members of any company. If you look at my management team. I'll ask them to stand.
Believe me, these talented women that work for me would not let me not pay them fairly or pay our teammates fairly. I'm going to ask Andrea Smith, who runs our team, to give you a little bit more detail. Before we do that, I'm going to give you three broad ways that we think about this. One is what we do as a company, obviously, and how we employ people. The second is we have our impact on our board, as I showed you, our senior executives. The third is doing programs within our diversity inclusion efforts in the company, which are critical to our success. Our LEAD for Women network, which is an informal network which the team runs itself. It's 25,000 people, 39 chapters around the world. I'll give you one specific other thing we do with this benefit.
If you have seen some of the slides. We do a program called the Global Ambassador Program in partnership with a group called Vital Voices. The Global Ambassador Program effectively takes our leadership development techniques around the world. We've done it in Haiti, which I attended. We've done it in India. We've done it in a lot of other countries to help develop women leaders across time. There's nothing more critical than to make sure everyone feels they have a chance. Andrea, do you want to hit a couple of the others?
Thanks, Brian. Just a couple other points. Over 50% of our company is made up of women, and we've really focused on hiring. Brian's mentioned some of the internal development that we do. In this year alone, over 33% of the people we've hired in senior positions have been women. The concerted effort that we have, we've got these enterprise resource groups in every line of business. Over 3,000 people participate in global tech and ops women's programs. In wealth management, we have close to 5,000. It's not just hiring, but it's also the development and the promotions that we're doing.
Thank you. Next question. Who else has a question? We'll go to 38. I think that's trying to hit the new voices.
Thank you very much. Armond Cohen, I'm the Executive Director for Clean Air Task Force, which is an environmental organization with offices in the U.S. and China. We're focused on driving the world's energy system to a zero carbon level, which is what the science is saying we need to do to prevent climate change. I want to recognize Bank of America for its coal policy, as recently announced. It's a huge step forward, as my colleagues at the Rainforest Action Network indicated, it's going to change the conversation. We greatly appreciate that, particularly the focus on the worst practices of the global industry on coal, specifically mountaintop removal. At the same time, we're pleased to be partnering with Bank of America on looking at solutions beyond renewables as well. You're doing great work in developing the renewable energy economy.
It's also true that fossil fuels are going to be with us for a very long time. 85% of the world's energy system is powered by fossil, I also commend you for mentioning in your policy of work on carbon capture and storage, which, if we don't have that technology commercialized, we can pretty much forget most of our climate targets. You're also supporting work by my organization and others to look at a variety of low-carbon energies, including advanced nuclear energy that might be safer, cheaper, and less prone to weaponization. It's clear that to completely decarbonize the world's economy is going to take everything we have. The research that you've been supporting, the dialogue that you've been supporting, some of which is not always popular, is huge and it's already changing the conversation on this important topic. Thank you very much.
Thank you. Third question, 317.
First, I want to say thank you for the chance to ask you questions each quarter with the quarterly earnings. Just to make it crystal clear, the reason I'm asking questions today is less to get answers from you, but hopefully to hear from some other board members. I was at Bank of New York's annual meeting two weeks ago. You had multiple board members, unlimited time. Last week, I was at Citigroup's annual meeting, multiple board members spoke, unlimited time. With that as a prelude, I'm hoping to get an answer from Thomas May, head of the governance committee, per my question before. Just to remind you, I had three points. Target, which financial metric will you use to hold management accountable? Second, the scorecard.
Why allow the company to avoid the bad items, $4 billion accounting misstatement, missed targets, 2% ROE, exclude those from the annual report and the proxy. Three, the process. Why did they promote you, Brian, from CEO to also Chairman without checking with shareholders first? Thank you.
Let me just hit the targets because it's all in the proxy statement. Mike, I'm sure you've read it. The targets we have are set based on to achieve the stock that's awarded in a prior year, or set based on the future performance of the company, but they're for the stock that's earned in that year. There's no exceptions, no deductions. If you look at the disclosure, the targets we awarded for the 2012 year when our stock was up 100%, in fact, will pay out at a very low rate three years later because of litigation expense and other things. That's the adjustment. It happens every year. The three-year average ROA and the three-year average tangible book value per share is required to be met for us to get those performance shares.
It won't be met for 2013, 2014, and 2015 because we have to earn $40 billion or something to actually get the That's not in your model, at least, Mike. It's a self-correcting thing. It takes care of itself, and we will not receive those awards. Let me have Jack Bovender, who is our Lead Independent Director, speak to the question of the board's decision on the Chairman and CEO. Jack?
This process started with the process that led ultimately to the combining of the Chairman's job with the CEO's job. It started back in the summer of last year and went into the fall. As you've read in the proxy, the governance committee spent a lot of time working on this, how this should evolve, what should happen with this. I will tell you personally, having been on this board for three years, I was not here when the original shareholder vote was taken to split the CEO and the Chairman's job.
As I thought through this process, when we had a fulsome discussion at the board level about what we should do, we had to, for sure, since Chad Holliday was leaving his Chairman's job, it was for sure that we had to make a decision about the Chairman or Lead Independent Director, whatever you might entitle the independent director who would step into those shoes. I quite frankly, as I looked at that situation, thought, well, when that vote was taken, there was a different CEO, and it was a badly broken company. It was no longer a badly broken company. We had a high-performing CEO, and I felt personally that he deserved to have that combination title, Chairman and CEO. I still feel that today.
I spent a lot of the last two or three weeks on the telephone with a lot of our shareholders, our larger shareholders, who expressed, most of them, that they did not like the situation in which Brian was going to be Chairman and CEO, quite frankly, didn't like the process. It became apparent to me through those conversations that they were right. They deserve the right, the shareholders, to vote yes or no on the ratification of the amendment that changed that whole process. Brian called me. I can't remember if it was Friday or Saturday.
He'd had deep discussions with his senior management team and others about this whole issue, it was his suggestion to me, which I wholeheartedly endorse, that we in fact put this proposition to the shareholders in as quick a time as we could possibly get the information together, make the arrangements to do so. You saw the letter signed by both me and by Brian that promised that we would do that before the next shareholders meeting next year. It is my feeling, and I think the feeling of most of the Independent Directors or all of the Independent Directors, that we should do this as soon as feasibly possible.
Thank you. Other questions or comments? Let's go to 25.
Good morning. My name is Ben Collins, and I am here with Rainforest Action Network, or RAN. At past shareholder meetings, my comments have urged Bank of America to cut its financing for the coal industry. Both coal mining and coal-fired power generation have devastating impacts on the health of communities in the U.S. and around the world. The bottom line for the climate is that continued reliance on coal and other fossil fuels will lock in a future of extreme climate change. Today, the need to transition away from coal remains urgent. I want to acknowledge the progress your institution has made in addressing its financing exposure to coal mining. As Mr. Pfeffer mentioned in his comments this week, Bank of America strengthened its policy on coal by committing to reduce its financing exposure to the global coal mining industry.
This commitment also pledges to cut financing for companies that engage in the devastating practice of mountaintop removal coal mining. This policy change is significant. As we note in our annual coal finance report card published this week, Bank of America's environmental rating for coal mining finance is now the highest of any of its global peers. The transition to low-carbon sources of energy will require continued leadership by your bank. As the shareholder proposal on climate risk emphasizes, it will be critical for Bank of America to disclose and reduce the carbon footprint of its overall financing portfolio. Your institution's continued financing for coal-fired electric power production remains an ongoing climate and public health concern. That said, we greatly appreciate the time and hard work of your environmental and executive teams in taking this significant step to address your bank's financing exposure to coal mining. Thank you.
Thank you. Let's go to 309.
I don't want you to faint. I'm about to compliment you. You want to get a chair.
Yes. Maybe I could only live 30 more years, so I might as well get a compliment between here and there. What the hell.
But I'll-
If you give me an exact date, I can make a bet here.
I'll do it afterward, at the last part. The woman asked about compensation for women. Say you have 1,000 women or all these people here. The issue is, as far as she's concerned, and as far as I'm concerned, is when you hire two people, one's a man, one's a woman, they have the same qualifications. Do they get the same salary and benefit?
Yes.
Historically, in most companies, that doesn't happen. When you do this, you need to make sure. You also need to go back and check people who have the same qualifications now and are employed here. Are they getting the same compensation? I suspect that you won't be shocked to find out that it doesn't happen.
It doesn't happen here.
All right.
We check it continuously. We check it as we upsize and outsize, hire jobs. Every job is scoped out for the market of all the senior levels, and the other jobs are standard compensation across, no matter who fills.
Okay.
We do it already.
Secondly, I stopped using the Bank of America near me because it is not handicap accessible. I did this years ago. It's relatively simple to fix. No one is showing any interest in it. I don't see why someone using that bank with handicap parking has to walk outside in the snow, pouring rain, in a 90-degree temperature from a distance of here all the way around there to get into the building. It can be fixed easily. You don't do it. That's one of the reasons. The fact you guys screwed my mother. The compliment is that, wow, you're going to vote next year on whether or not you're going to get the combined. Should have been done, it was done behind the door, and it should not have been done. Does that mean that you are still only one officer? You're wearing one hat.
Is that correct as of now?
I'm the chairman and CEO of the company. What Jack decides is we'll go to ratify that decision by the board of directors, not later than the next annual meeting. Thank you for your comments. Next. 178. You only get 10 more years.
I'll just take a minute. You can pass it along. Good morning.
Don't. This isn't Congress. You can't cede your time to. It all comes back to the House. We allocate it, okay? Just remember that.
Bob Cobbett from Lake Lure, North Carolina.
How are you?
I own 5,000 shares purchased before the crash. Been a rough ride.
Yep.
I'm a right here, right now guy. My common question is about dividends. All your competitors are paying higher rates of return on dividends than you are. It appears as if the company is focusing on stock buybacks to drive share price. In my opinion, the focus maybe should shift more toward dividends that drive share price and put more money in the pockets of the shareholders.
The discussion about whether to have dividends or share buybacks is one that we get various points of view from various investors, large and small. We first needed to get the dividend off a penny. We moved it to a nickel, then we'll continue to look at the proportion that we pay in dividends relative to share buybacks. That'll be in part on the valuation of stock at 1.2 or 1.3 times book. If we should be buying the stock, it's better for shareholders. It increases the investment in the company for the rest of the people. At other times, that might be a different answer.
We look at it all the time and the balance between this. By the way, the rules of which Bank of America holding companies are regulated as to what they could do as a percentage of their earnings and dividends and stock buybacks as part of the process. Believe me, your interest in the interest of the board and mine are all aligned. The idea is to get the capital back to the $8 billion we've done across the last five years, even as we've taken a lot of things into account. It's a goal because that's one of the four ways that we're going to generate value for you. Either way, it comes to you. It's your capital, or it's going to be left on a balance sheet pending the chance to send it out to you. That's interchangeable value for us.
We're trying to drive all three things for you, and we'll get there. Other questions? 335 is a new one, I think.
I'm Tommy Norman. I'm Chairman of Charlotte Bridge Home. Thanks for having us here today. About three and a half years ago, we got a phone call from a friend that was in the Pentagon, and he said, "Tommy, would you and your wife be willing to help a family? This is a young Marine going through an amputation. It's not going well. They want to move to Charlotte." We started doing that. Today, we are somewhere over 1,700 families that we've worked with. Bank of America was one of our first calls. We went to see Hugh McColl. He said, "I need you to go see Charles Bowman. Do you know Bowman?" I said, "No. I expect I can get to him." He said, "If you can't, I will.
Mr. McColl is usually that efficient.
This is how efficient it was. Today, you all have hired since that time, some 7,000 veterans. Today, you've committed some $14 million for veterans efforts. Today, you have some 2 million veterans accounts with the bank. Today, you've donated some 2,000 houses to veterans. All this has taken place over the past three and a half years. It doesn't happen without leadership, commitment, passion, and all the things that make a difference in these young people's lives. We have sent nearly 3 million young men and women since 9/11 to war. They're all starting to come home now. About 1,000 are coming home a day. About 100 of those 1,000 find jobs within six months. We got a long way to go. 50,000 have been disabled forever. That doesn't even speak to the PTSD. Your organization and board have been unbelievably supportive, probably the leaders in the country.
Keep it up. We're indebted. We're really grateful to you. Thank you.
Thank you. As I said earlier, thank you for your nice comments, I'm glad that Mr. McColl was able to get you to Charles a few years ago. We started on this a number of years ago with the simple statistic you laid out is how many soldiers are coming back from war and what we owe them as a country. We had two things. We had houses that were empty, and we had veterans that needed homes, and we paired it up. If you watch that take place in the markets that some of us have the privilege to go see and see it happen. A couple of years ago at the football game here, we were able to give away a house, and you see the reaction and the family face.
In that case, it was at the halftime at a game, which made it a little bit more public. If you see the reaction on their face, whether it's private or public, the recognition of what our teammates do for these families is tremendous. I think it's been a great thing for us, but most importantly, it's been great for our teammates to see how much good they've been doing. Thank you for your comment. 319.
The $4 billion stock buyback, the Fed did not approve that.
Right.
Has the Fed approved the $4 billion buyback last year? If so, how much of that buyback has been accomplished?
The Fed last year, we got approved for a $4 billion buyback and the increase of the dividend from penny to nickel. We started on that buyback program. We found a mistake in our capital calculations. We took it to the Fed. We stopped the buyback. I think we ended up buying $1.3 billion and change that year. Then this year, the conditional approval for the amount was to keep the nickel dividend and $800 million a quarter of stock buybacks. You go for this every year for, this year it was 5 quarters, typically 1 year ahead, and we'll continue to-
We did
$2 billion last year.
We had to shut down until we got the resubmission and the approval this year.
Well, how much was actually bought back in 2014?
$1.3 billion, about that.
How about this year?
This year, we got our approval in March and we've been buying since then, and we can buy up $800 million a quarter. You can just assume that we're busy at work doing that.
How much to tow?
It'd be three quarters times $800 million or $2.4 billion for 2015. Any approval goes through the second quarter of next year. There'll be $800 for a quarter for two quarters in 2016. There's another $1.6 billion. Right, Bruce? 179.
Good morning. My name is Brian Friends. I'm an investor. I admire and respect the challenge you face in keeping all these different stakeholders happy. Seems like a tough job. My question, I'm just a regular investor, and my question is about, of the things that Bank of America can control, what are the biggest risks that you think that the company faces? What are you doing to manage those risks? Furthermore to that point, are there any competitors that you admire and respect, that you think are doing a good job at managing these risks? Thank you.
I respect all our competitors because if they have one client we can get, that's what we're up to do. Let me talk about risks. When you look around the world, you can come up with a risk that could affect the financial services system. Greece, Russia, anything you can read about in the paper. We assess all those. There's the drought in California that we talked about yesterday. I'll finish up, sir. Just so we look at all the risks, and you can't focus on any one. The largest risk any financial services company faces is the core risk of an economy, right? If the economy doesn't grow, we transmit the economy from our customers, the economy to our customers. They have more money, we have more deposits.
If they need to borrow more to put up a plant, to buy a piece of equipment, we do that. If they have access to capital markets to buy a company, we can do that. It really is driven by the economy. One of the things that's inherent in your instrument of bank is, the economy's going to drive it. It's going to provide a framework of what you're working against. Secondly, the interest rate environment reflects the economy and therefore reflects how you do it. In this period of low interest rates is one of the most difficult for banking because frankly, we have $500 billion of non-interest-bearing deposits that they hit a floor. The rates came down, and that's for our margin, and that's why we've been able to hold it on a core basis, 220-ish basis, and been fighting to hold it there.
As rates rise, it'll be better. The core issue is the economy. It's the economy in the U.S., the economy in China, because simply have some exposure in China, it's the economy in Brazil. We manage the economy, and that's the number one risk. When you think about what's been slower to come back, the U.S. economy, and as it picks up steam and rates rise, we will earn more money, not because anything else other than some of the fundamentals have been hurting us will go out of the system. More importantly, it isn't the interest rate environment. It's the fact that rates are rising because they're growing economy. There's a lot more opportunity there, and that's what we really look for. Now, what have we done to position ourselves?
This is why it is critical to understand some of the stuff I was mentioning earlier. If you look at our stress test results, the charge-offs expected by the stress test results are about 50%-60% of the rate that we actually experienced in the last crisis in a scenario with a steeper than last crisis. How do we do that? By how we position the business, what credit quality underwriting and things like that. That is how we actually manage risk. Have a diversified set of businesses, manage the risks within those businesses well, manage the client selection well, and not let anything damage the company. You handle the economic risk. We do not control the economy, so we will be recipient of what happens. By actually being diversified enough and structurally sound enough in your credit underwriting, that in tough times, you will do better than we did last time.
We will not have to dilute the shares, and that is effectively different. We have $11 billion-plus shares in our share calculation. In a lot of time periods people are referencing, we had 4.5 billion. So we got to get those shares back through stock purchase and other things. But on the other hand, what we cannot do is ever issue shares again to grow this company. That is important. 179.
Hi, good morning. Ethan Elkind with the UC Berkeley School of Law at our Center for Law, Energy & the Environment. Over the past six years, with Bank of America's support, we have been working with clean technology leaders, business leaders from California and outside of the state, who are reducing greenhouse gas emissions through their business activities. Everyone from home builders and walkable transit-oriented neighborhoods to farmers doing efficiency projects to rooftop solar installers. But there is 3 technology areas that are going to be critical to meeting our long-term greenhouse gas emission reductions. I applaud the bank for the investments and encourage them to continue the financing, other financial institutions as well. These 3 areas include, number one, energy efficiency.
Not just local contractors who are going in to make buildings more efficient, saving the owners money, but also networked appliances that can activate when the grid is cleanest and cheapest. Number two, renewable energy, and I applaud the almost $30 billion commitment to renewable energy investments. That is solar, wind, and geothermal where available. The other big one is energy storage, including battery technologies, because a lot of that renewable energy is going to be intermittent. Wind does not always blow. Sun is not always shining at night. So we need to store that surplus energy and dispatch it when we need it, and that is going to be critical to reducing the carbon emissions and, as Andrew Pfeffer said, transition to that low-carbon economy.
It's also batteries, not just for that kind of storage, but for electric vehicles, which reduces our petroleum dependence and also provides a better drive. If anyone's had a chance to drive an electric vehicle, superior to internal combustion. I'm not making money on that, but it's true. Those are three critical investment areas, and I just want to applaud the bank for their support, encourage more financial institutions like yours to continue in those investments. Hopefully with that kind of financing, we can transition to not just a low carbon economy, but an economy that's growing and works for more people as well. Thank you very much.
Thank you for your comment. Other questions? Let's try 259, someone.
Brent Edwards, investor. Hi. This is my third shareholders meeting, congratulations on improving the operations and getting this back, at least at this point, I also want to congratulate your guys. From running a small business, you've got to have people that are very good at what they do in order to make the CEO or the person managing succeed. Congratulations to everyone. My comment is, hopefully, the stock price won't go a lot lower, I very much applaud the capital returns and being stock buyback . Even this year, if we purchased $4 billion worth, that's 250 million shares, and the compensation for the retirement plan for the employees, that's going to take up another 125 million out. I applaud that part of it. My question is about operations.
You mentioned revenue, of course, is stagnant at best because of eliminating businesses and low interest rate environment. You mentioned that $2 million every year that were going to be eliminated, that happened last year. You mentioned there was, in the first quarter, 6% less in expenses than the prior year. I was wondering if you had a goal on that. Also, the consumer real estate services, the mortgage business, even if you eliminate the litigation expense, which is $8 billion, it still lost money. Can you talk about where you expect that to be, that to go, and also what's your question? When you think it'll be possible? Thanks.
Sure. Look, we continue to work. The efficiency ratio in the company is our cost over our revenue is still too high. Even pro forma basis, taking out the charges, I think we're in the 70 range, and we've got to get it down, and we're continuing to work on that. That's a thin project. That's a continuation of the New BAC rollover of getting the effect of that. We finished that up in a lot of part last year, and then you get a full year's benefit, and then you keep working on the new ideas coming in, and there's just many things. An example, at the high point of about 125 million sq ft real estate occupied, we're down to probably 85, 90 million now. We'll continue to drive that down by efficiency of the space we have, continued changes.
We still have work to do ahead of us, so don't think that because we completed a New BAC and got the $8 billion out that we aren't continuing. You flipped to another question, which is actually one of the critical things that we focus on, which is our mortgage servicing business, which is what you see in LAS, which is both the difficult side of the business in working to help homeowners stay in their homes through modifications and other programs. It's also the good side. Right now, that still loses money on an operating basis, and we are not satisfied with that. You have to remember that business went from about 15,000 people, 10,000 people, up to 58,000 people, and is now down below 20,000 and counting, working. That's been three to four years now. Think about the size and change in scope.
Once we've gotten that thing settled down and got behind us a lot of the work. We had a million+ delinquent loans a few years ago when we stood here. Now we have 150,000. We continue to work that down, then we can start to normalize it. The issue is the systems work and things we didn't do. You could not take the time to stop working hard for those consumers until you got to the place where you had enough of it done that you could actually look forward. We look forward to driving that down. My colleague, Terrence Laughlin here, and his teammates get the answer from me every week as to why it's not coming, getting in line faster. You're exactly right. We've got to get that back to profitability at some point. Mortgage servicing will be fine.
We'll be much smaller. There's no stopping. When you think about us long term, the issue is keeping the expense revenue equation in line. We got to keep bringing it down a little bit more. The reality is as revenues rise, we have to be able to do two things, continue to keep the expenses a couple hundred basis points different than the revenue, below the revenue, and also in that, continue to invest the $3 billion we invest in new products and technology initiatives a year. Continuing to invest in our cybersecurity, continuing to invest in our product capabilities, continuing to invest in the upgrade of our real estate and branches and things like that. Most importantly, continuing to invest in sales force. If you look at us during the time where we have gone from about 300,000 teammates down to 220.
We have more salespeople today in the broadest context, people who cover clients, whether it's in all different business under a different name, than we had when we started. That change is critical to build the growth engine we want going forward. That's the science, and I thank you for recognizing my management team that does all this hard work. That's the science and discipline we have to have because in the end of the day, if you want to give me an interest rate environment that's normalized relative to the 30-year average of America, I'd take it tomorrow morning. Life would be easier. The economists don't predict that for a few more years. We got to hard work at it. 309.
For the record, I did a little calculation. I had to go out in the hall in order to use my calculator to check. The approximate price of the stock now versus what it is, it's down 75%. It was down probably 98% when it crashed. You can say it's come back up, but it's not even close to where it is. When you buy back stuff, you're buying it back at a severe discount rather than what the price was before it crashed. The dividend rate is less than 2% of what it was before the crash, before you all lied to us about it and the stock sank. Number two. Number three, if the proposal to combine the two has to go before the shareholders, you should not have both those hats or receiving a salary of both of those at this time.
I'm going to ask that you withhold doing that until the shareholders have had a chance to vote on it. I think the Board of Directors would be remiss if they did not recommend that to you behind closed doors at some point this afternoon or wherever to do that. At this point, since my goal was to try to be out of here by noon, since I have at least a six to seven-hour drive.
Thank you, good to see you again. 289.
My name is Robert Henry, I'm from the Greensboro area. I worked for Bank of America for 48 years. I just retired in March 2015. Started under Thomas Storrs, went up to now. My question is, after I retired, I visited some of the branches, I went in one of our business branches. They had one teller on the inside, one teller on the drive-in, the line was out of the door. I asked the person on the floor, I said, "What's happening?" They said they're cutting back. I went to another branch, same thing. Is that what we're doing now? We're going to run all our customers away, send them over to the credit unions? That to me looks like that's what's happening.
Thank you. Sir, thank you first for working for our team for 48 years. I had the pleasure when I first became CEO to get to spend some time with Mr. Storrs before he passed away, it was a privilege. If you think about the challenge in running 5,000, 4,800 places is something we have to deal with every day because the nature of the business is shifting dramatically. Thong Nguyen and Dean Athanasia, his teammates, have to make the decision every day. As they listen to the customers, they watch the lines. We measure them in every branch at all times. We can see if we're going too fast or too slow, we continue to address that. The basic principle is we're trying to make sure that we stay with the clients who have changed their behavior dramatically.
We didn't have mobile customers 10 years ago. We have 17 million of them now. They couldn't deposit a check till the summer of 2012. Now, 13% of all the checks deposited at Bank of America by consumers, people take a check and send it in. We had ATMs for 30-plus years or whatever it is. You couldn't get a receipt back when you deposited there until eight, 10 years ago. When we did that, we now have more deposits made at ATMs. Not all customers want to do it one way or that way, that's fine. We continue to drive it. The pure facts are our attrition's an all-time low. Our customer score is as high as they were going back to before the crisis. We continue to end up with a better sales relationship with our clients. The team works constantly at that.
If you have specific branches you're concerned about, Thong is right here. Believe me, when I get a complaint from a customer in email, I make sure Thong gets it. They go and look at every situation, we appreciate your feedback. Across the 60,000 teammates they have, they're managing real customers that have real behavior changes, real people, they're trying to manage it the best way they can. Thank you for comments, Thong will see you afterwards and make sure that we got that branch lined up. 261.
I guess almost afternoon, but good morning. My name's Dale Morrison, manufacturer. My question deals with the litigation expense. Do you have a forecast for litigation expense that Bank of America may incur for this year, 2015, and for next year, 2016?
We don't give a forecast on something like litigation because, one, it's inherently fraught with the timing of court cases. We settled one four years ago, and we're still finalizing that. We thought it was done then. If you look at it, let me flip that question to give you a sense. If you take the last four or five years and take the litigation expense that I showed you and back out of it transaction-related litigation, i.e., connects the deals and mortgage-related litigation type of thing, you get to about $250 million a quarter for litigation. That we see going back a fairly long time because it's a big enterprise. Things go. Would it be below that in periods? Yeah. It was up. It was higher in that period. Last quarter, we had $370, $380.
The view is that I wouldn't call it normalized because we try to aspire to get to zero. I would tell you that it is a lot different than the average that if you took the math earlier and divide it by the 20 quarters, right? We've seen a lot of that go behind. It came right out of the numbers right. Third quarter, we had litigation settlement with Justice. Fourth quarter, we didn't. Moved up First quarter, we didn't have any major litigation settlements. We disclose all the specific suits in 10-K. We disclose a thing called range of possible losses, which is out there that is what we think is embedded in the book today.
If you really want to think about it more as an investor would when times are normal, even in the tougher times, more litigious times in America, that's what we've seen outside of the couple of specific issues related to companies that $317.
I wanted to follow up on an earlier question. Hopefully we can hear from the Lead Independent Director again, or even the head of the Governance Committee about the process of adding the position of Chairman to CEO. First, as far as shareholders being consulted before the board made that decision. It seems like there were maybe four months from the summer until October 1st, when you had a chance to talk to investors. With regard to proxy access, presumably you reached out to investors for that. Why not an equal effort for the CEO, Chairman combination? As far as the new vote, will it be binding? What assurances can the board provide that if the shareholders vote against the combination, that the board won't nullify that decision again?
The third thing that the Lead Independent Director just said, he said, quote, "a high-performing CEO." I'm not saying one way or another, but which financial metrics were used to reach that conclusion of high-performing CEO? The 2010 annual report, I think it's the third paragraph, says return on equity is really important and the ROE for the last five years was under zero, one, five, and 2%. Hopefully we can hear from one of those two board members.
Sure. Let's refocus on return on tangible common equity in the first quarter. As reported, it was 6%, tangible was 8%, excuse me, regular was five and change. We expect that to get to the 12%-13% level. If you pro forma out the couple adjustments, we moved up to, Bruce, what? Near double digits the first quarter on tangible, and we'll continue to drive that. We don't think it's not important. It's just we based our pay plan on return on assets because at the time, this plan goes for five years. At the time, what the equity would be required in our company was a subject of great debate and actually changed in those five years. Right? The question when the board's facing the decision, I'm going to do something for five years now.
Because I'm not allowed to touch, not allowed to change, not allowed to exclude anything from, not allowed to amend this firm. We had to pick something, picked the ROA and tangible five per share, which I think a good method. The return on equity, once you have an ROA, is what your equity is and what your equity requirement is. On the questions of the resolution, it'll be a resolution to ratify the joint. If the shareholders vote it down, the board will take that under consideration. I think that's what Jack said. We'll have to be bound by that resolution that they didn't agree to ratify. Was there another question, Jack? 316.
Mr. Moynihan, first of all, I want to say thank you and congratulate you on your efforts with the Global Innovation Lab for Climate Finance. We were recently in your building and really appreciate the hard work that you're doing in leading that effort on behalf of the U.S. government, the German government, the United Kingdom, to create new climate finance instruments. I also want to thank you on your efforts on coal. Mr. Doody wanted me to thank you. He's not here today. I have a question that I think is a real opportunity. Listening to you talk about 20 minutes ago, you were talking about the economic risk embedded in banking, if banks are obviously this translation mechanism as an economy to the public. If we accept the hypothesis, simply hypothesis, that climate risk is systemic across all economies.
Look at California's economy, for example, with water risk and elsewhere. My question for you is two parts. One, would you consider incorporating climate risk into the board governance documents at the board level so that your chief risk officer and throughout the firm would have, from a risk appetite perspective, be able to incorporate climate risk and other environmental risks that fall underneath that within the risk appetite of the organization? That might protect your shareholders and further, from a risk perspective and from a return perspective, might help you grow your assets over time. Secondly, is a very specific question. Coal versus renewable energy, or specifically renewable energy. I'm curious how much renewable energy financing has accrued to net income on a quarterly basis?
Andrew, the volume is, as Andrew said, what, Andrew, wouldn't you say the volume was three times? Three times. I don't know the exact math off the top of my head of what three times the number we do to coal is. On the risk, we take into account these types of risks, we haven't taken down exposure to coal because of the fundamentals of the industry and all the things we spoke about. I'm not sure, going to the earlier investor's question. There's a lot of risks that are in a risk appetite, this is one of them because it affects the different companies differently. In those companies, there's battery manufacturers, as Isabella spoke about before. In those companies, there's alternative energy companies. In those companies, mixed companies that do a lot of different things around energy.
Some new, some old, some making the transition happen. We take into account as we underwrite individual credits. I think, like we said on the California drought, we looked at the people who would be affected by it based on our estimation. Other questions? 32.
My name is Vicki Perrin. I am a shareholder. I am a Bank of America customer, and I am an employee of Bank of America. I'm close to retirement, and I say that so you all know that I'm comfortably going to speak my mind. As I listen to neighbors, friends, and other family members, I realize that we're all in the same situation. It's been a tough few years for all of us. We've all lost money, whether it's through Bank of America stocks or other stocks. As a customer, I know that you value us as a customer, and as an employee, I know that we are always told to value our customers, to do what we can for our customers, and we do. As an employee, I know that you, Mr. Moynihan, and our leadership team value us.
You've put tools in place to ask for our feedback, to ask for our input, and then you act on it. Before I retire, I want to thank you, Mr. Moynihan, and the leadership team, and Bank of America is a great place to be employed. Thank you.
Thank you, ma'am. I will thank you on behalf of the leadership team, and thank you for the many years you worked for us. Stay a customer after you retire, of course. Any other questions? All right. Seeing no other questions, we're going to adjourn the meeting. On behalf of Jack Bovender, our Lead Independent Director, and the rest of the board of directors, I thank you for being here today. We look forward to seeing you next year.