There are four important votes coming before shareholders of banks and financial services firms during the upcoming annual meetings.

Calvert will ask shareholders of BB&T and Capitol One to evalute “overdraft policies and practices and the impacts these practices have on borrowers.”

Christian Brothers Investment Services will ask shareholders of Cash America, a large payday lender, to adopt a policy that ends payday lending.

The Community Reinvestment Association of North Carolina is asking shareholders of JP Morgan Chase to “cease its current practice of issuing Refund Anticipation Loans.”

I am thrilled to see the socially responsible investment community acting to address these issues. This movement has been very active in pursuing important causes for environmental health and human rights.  There has been less attention to financial issues. That day has come. Perhaps this reflects how even the well-off have been hurt by the subprime lending crisis. My only lament is that there are not more than four ballot initiatives.

The Mortgage Banker’s Association of America, unable to make good on its mortgage, has entered into a short sale on its commercial loan outstanding on its Washington, DC headquarters.  The MBAA is selling to CoStar for $41.3 million, a sum far short of the $75 million in debt that they took out in 2007.

The MBAA announced their intentions back in October to sell 1331 L. St. because they couldn’t make payments on their $79 million headquarters. The MBA had a whopper of a mortgage – a variable-rate loan mortgaged at 94.9 percent (more…)

In a surprising, if perhaps non-flattering moment, Housers is caught on camera protesting at the Bank of America shareholders meeting.

Housers appears in this photograph, published by the Charlotte Observer.

Perhaps a slightly more flattering image came across from the Philadelphia Business Journal.

This is a better picture, eh? It was a great bit of organizing by SEIU.

SEIU was incredibly well-organized.  They brought out about 30 protesters from the area surrounding Charlotte.  That is virtually impossible in a company town like the Queen City.  Then, they brought along two disgruntled ex-employees from B of A’s credit card division.  Those individuals (Donna and Christopher Feener) testified to the incentives, and the pressures, that they were encumbered with to make customers add to their credit card balances.  They were rewarded with incentives for balance transfers, and encouraged to get the highest interest rate possible on those transfers, they said.  They also brought along a Catholic minister, who spoke of the genuine social justice motives underpinning Wednesday’s protest.

SEIU’s proxy resolution passed with 50.3 percent of the vote.  This is an incredible outcome, and a defining statement of the national feelings about the actions of the finance industry.  Lewis appears to have been a scapegoat.  It may be that a good portion of the “against” votes were motivated by corporate governance concerns.  Many feel that at any corporation, that the positions of CEO and Chairman of the Board should be separate, in order to develop institutional accountability.

A shareowner proposal to be presented this week at General Electric’s annual meeting reveals one of the devilish details about executive pay.

The IUE-CWA’s pension fund wants General Electric to cease the practice of giving dividend payments to senior executives on shares that they do not own.  In this system, senior executives get dividends on share options that hold but that they have not yet exercised.

The IUE-CWA’s rub is not that executive officers do not deserve compensation.  Instead, they are seeking an alignment between compensation and performance.  Short of a decision to cease the payment of dividends on common stock, this dividend policy guarantees that GE executive officers will be paid handsomely irrespective of share price.

In some instances, these options generate substantial dividend payments.  The IUE-CWA estimates that since January 2006, GE’s five senior officers have collectively been paid $12.5 million in dividends or in like payments.

GE defends the practice, noting that divident payments serve to link income generation with stock ownership.  That is a fine principle, but in creating that standard, GE dodges the notion of linking pay to – ahem – performance.

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This blog entry is not a recommendation for shareholders to vote, or even to vote in a certain manner, on their proxy.

There is nothing quite like a loan that you don’t have to pay back.

At least, that is what a few of the top executives at Wells Fargo must be thinking to themselves: Dick Kovacevich, Richard Levy and James Strother are all recipients of Wells’ special loan program for executive officers.  Wells discontinued the program on June 30th, 2002, but officers who already had loans under the “Relocation Program” were not required to pay back the outstanding principal.

Kovacevich received his $995,000 loan in 1998.  Levy received $325,000 in 2002. And Strother received $310,000.

In 2008, the group made interest and principal payments of $0.  That’s a pretty good deal.

Interestingly enough, these loans seem to have to do with moving costs then they do to the position of the loan applicant.  Levy, for example, moved from New Jersey to California in 2002, whereas Kovacevich moved from Minnesota to SF four years later.  Presumably, distance and inflation mean that Levy had a higher moving bill.  There’s also the likelihood that the cost of selling a home might be more, if only due to realtor’s fees.  Then again, Wells was also willing to buy the home of an officer under this program. Oh, and they were also pretty much willing to pay most of the mortgage costs on the new home, too.

The details on this are fairly complicated.  They are described on page 38 of this year’s proxy.  The explanation seems to provide the specifics, but they avoid the larger truth – that this serves to undermine the SEC rules on salaries.  The SEC allows officers to have any salary that their company decides, but taxes are not deductible for salaries above $1 million.

Moreover, new rules after 2002 only sweetened the deal.  Now, the company will buy (through a third party) the home that an officer sells in order to relocate (at appraised market value).  They will also pay the taxes on any amounts received by an officer for relocating.  Also, they pay all transaction costs (closing costs, realtor fees, titling, et al).