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Boston Common's Testimony on FleetBoston - Bank of America Merger

Bank of America - FleetBoston Merger Testimony
for Public Hearing by Federal Reserve Bank of Boston

January 14, 2004

by Lauren Compere, Chief Administrative Officer
Boston Common Asset Management

My name is Lauren Compere. I am the Chief Administrative Officer at Boston Common Asset Management, LLC, a full-service, employee-owned social investment firm dedicated to the pursuit of financial return and corporate social responsibility. I appreciate having the opportunity to express our concerns about the proposed merger of Fleet Boston with Bank of America.

Boston Common has filed shareholder resolutions with FleetBoston and Bank of America asking for a detailed report on the impact of the merger on director and executive compensation, job losses, charitable giving, and community reinvestment initiatives. A broad-based group of our colleagues in the social investment community have joined us in asking these questions. Among them are members of the Interfaith Center on Corporate Responsibility (ICCR), a coalition of more than 275 faith-based institutions with combined assets of almost $100 billion, mutual funds including Domini Social Investments and Ethical Funds, and other social investment firms such as Trillium Asset Management and Walden Asset Management.

I would like to submit for the public record a copy of the shareholder resolution that Boston Common filed with Bank of America. I would also like to submit to the public record a copy of a letter jointly signed by Domini Social Investments, Walden Asset Management, and Boston Common Asset Management asking for more information on the impact of the merger on all stakeholder groups.

In addition to the significant financial risks posed by large mergers, mega-mergers like this one, where Bank of America will control over 9.8% of U.S. deposits, may pose broad risks to society, the environment, and the economy. Boston Common and our colleagues in the social investment community are specifically concerned about the impact on three critical stakeholder groups: employees, customers, and communities.

1. Job Losses - Bank of America officials have stated that they expect almost $1.6 billion in cost savings form the merger, some of it from job cuts. Boston Common is concerned that these job cuts will mostly hit back-end employees, the lowest paid and least equipped to deal with layoffs. We would like to have more information about the company's plans for layoffs and any plans to mitigate the impact of these layoffs on its employees.

2. Executive Compensation – We are interested in understanding what incentive structures are in place for the successful completion of the merger, most particularly what bonuses and other financial benefits will accrue to senior management and directors at both companies.

3. Community – Fleet has been a leader in everything from volunteerism to community re-investment. If we lose that leadership, this will be a blow not only to Boston, but to all communities served by the newly-merged bank. Fleet has won accolades for the work of its subsidiary First Community Bank, whose innovative approach to serving multi-cultural and multilingual customers has received national acclaim. We would hope that Bank of America would maintain the First Community Bank post-merger and build on this model everywhere Bank of America does business.

4. Charitable Giving - Fleet's $25 million in annual philanthropic giving makes it one of the region's most generous donors, supporting economic opportunity, youth development, and public education. Chairman Gifford has committed to maintaining Fleet’s current level of charitable giving. However, Boston Common remains concerned that the charitable giving will lose its regional focus. We would encourage Bank of America to maintain the FleetBoston Financial Foundation as a separate entity post-merger to ensure the continuation of Fleet's strong legacy of civic leadership, community service, and enduring community partnerships.

We have been encouraged by advertisements from both banks stating that this merger will benefit the banks’ customers, employees and communities. We believe that positive relationships with all of these stakeholder groups are essential to a company's long-term financial prosperity. Through constructive dialogue, Boston Common and its colleagues in the socially responsible investment community look forward to hearing specifically how the bank is planning to improve relationships with these stakeholders by means of the merger, and how the bank is working to mitigate any potential damage to these critical relationships.

Thank you.