FleetBoston CEO Must Share Both Rewards and Sacrifices

Press Release
For Immediate Release - April 11, 2001
Contact: Betsy Leondar-Wright
(617) 423-2148 x113

Resolution: FleetBoston CEO Must Share Both Rewards and Sacrifices

Meeting the needs of customers, communities and employees is crucial to the future financial success of FleetBoston, according to a shareholder resolution tying CEO pay to these goals. A member of Responsible Wealth will present the resolution at FleetBoston’s annual meeting on Tuesday, April 17, 2001, at the World Trade Center in Boston.

Last year, FleetBoston’s Terrence Murray received total compensation of $17 million, including a 25% increase in his annual bonus, making him one of the highest-paid CEOs in Massachusetts. These rewards came as the company’s stock trailed its peer group competitors by more than 6%.

2000 was also a year full of serious lapses in customer service for FleetBoston:

  • Last summer, the Massachusetts Banking Commission received more than 50 complaints a day from frustrated FleetBoston customers.
  • In July, Consumer Reports ranked Fleet the second worst regional bank in the U.S.
  • In December, Fleet was sued by Minnesota’s attorney general for illegally selling confidential customer information to telemarketers. This has since expanded to a national class action suit.
  • Last year, FleetBoston fell 38% short of its commitments to provide mortgages for low and moderate income families, made to ease regulatory approval for the Fleet-BankBoston merger.

The resolution filed by Responsible Wealth member Jenny Ladd would create positive incentives for executives to improve customer, employee and community relations, which in turn would enhance long-term business success.

Several other corporations – Bristol-Myers Squibb, IBM, and Eastman Kodak – have tied a portion of executive compensation to meeting key employee and customer service objectives.

"Long lines and customer service problems must no longer be treated as business as usual," stated Scott Klinger, co-director of Responsible Wealth. "FleetBoston has long provided its executives incentives for acquisitions; it is time to add some incentives aimed at strengthening customer service."

PHOTO OPPORTUNITY: Activists will set up a satirical toll booth at 8:30 a.m. on April 17 outside of FleetBoston’s 100 Federal Street headquarters and charge mock "user fees" to passers-by attempting to use the newly re-named "Fleet Sidewalk."

Responsible Wealth has filed shareholder resolutions related to executive compensation at seven companies: Disney, Citigroup, Raytheon, Household International, Exxon Mobil and AT&T, as well as FleetBoston. From 1990 to 2000, average worker pay increased 32%, just slightly more than inflation, while CEO pay rose 535%.

Responsible Wealth, a project of United for a Fair Economy, is a growing network of over 450 businesspeople, investors and affluent Americans in the top 5 percent of income and wealth who work to promote widely shared prosperity.

United for a Fair Economy is a national, independent non-profit that spotlights growing economic inequality and inspires action to narrow the wage gap.