Bank of America Corporation (BAC) Earnings Call Transcript & Summary

Good day, and welcome to the Bank of America 2020 Annual Meeting of Shareholders. I would now like to turn the conference over to Mr. Brian Moynihan, Chairman and Chief Executive Officer. Please go ahead.

Thank you, operator, and good morning, everyone. This is Brian Moynihan, and welcome to the 2020 Bank of America Corporation Annual Meeting of Stockholders. Before we begin, I want to thank everyone for joining us today via webcast. We are disappointed that we can't see you in person as we have for many, many, many years. I also want to start by saying I hope you and your family are staying safe and staying healthy as we address this global health crisis together. Of course, Bank of America is operating differently right now. Your company is following the advice from our medical experts. It is -- we are adhering to the physical distancing across your company, and we're making every decision with an eye to what's best and safe for our team, our customers and then to help our communities and you, our shareholders. The meeting agenda and rules of today's meeting are available on our virtual meeting website, and these are now in effect. In the event of a technical malfunction or other disruption that interferes with our ability to continue the webcast meeting prior to the opening and closing of the polls for voting, the meeting may be adjourned, recessed or expedited. If that happens, the polls will open immediately and will close 5 minutes thereafter. All votes received prior to the time the polls are closed will be counted, the meeting will not be reconvened and the results will be announced publicly. With that, I now call the 2020 Bank of America Corporation Annual Meeting of Shareholders to order, and I'd like to start with a company update. Our decade-long focus on responsible growth of Bank of America has prepared us for times like this. Over the course of the last decade, we've earned $127 billion for you and returned $97 billion to you and common -- our common shareholders through dividends and share repurchases, and another $14 billion to our preferred shareholders. All the rest of that capital is in our capital base to serve our customers and sits there to provide capital liquidity and capacity to serve our clients during this virus-related impact. After a decade of transformative change, we enter this period with strength and business momentum. First, I'd like to touch on 2019 results. While the full year of 2019 seems a long time ago, I would note a few highlights beginning with the company's record earnings. Your company earned $29 billion after adjusting for a $2 billion noncash impairment for joint venture. That strength and consistency in earnings is important to remember as we enter this uncertain period. From a business momentum perspective, each of your 4 businesses contributed strongly to the record earnings year. Each of the businesses held important market leadership positions and gained momentum throughout 2019. Consumer Banking strengthened our #1 market position in deposits, regain our leadership position in small business lending as the largest small business lender in the United States and significantly grew their customer investment accounts and assets. In our Wealth Management segment, we maintained our leadership position in revenue and profitability and grew households in both Merrill Lynch and our private bank at the fastest pace in over a decade. With commercial and corporate borrowers, we grew loans and deposits at a faster pace during 2019 than the rest of the industry while maintaining responsible underwriting standards. Investments and bankers across the businesses has increased our client-calling capacity and relationship deepening. We've also had investment banker strengthening our local coverage across the United States, which has led the way in increased market share and investment banking fees as we gain 60 basis points of market share year-over-year. Likewise, in our Global Markets business, we gained market share in several trading areas. This momentum carried over into a nice start in 2020 until the global economy began to show cracks as the current COVID-19 pandemic spread across the world. Just last week, we announced our first quarter results. We reported $4 billion in after-tax earnings, and that was after taking and setting a reserve build of $3.6 billion to our loan loss reserves. It is important to note, your company generated $9.3 billion in pretax pre-provision income, which was modestly down year-over-year in the first quarter of 2020 compared to the first quarter of 2019. In the first quarter of 2019 -- 2020, your company supported its customers. We funded $19 billion in new mortgages during the quarter. We extended $2.4 billion in new small business loans during the quarter. We also supplied capital and liquidity to our commercial customers by extending nearly $70 billion in loans during the quarter. All of these businesses also saw an increase in deposits, which contributed to $149 billion in deposit growth in the first quarter of 2020. Our institutional investors saw the need for temporary liquidity. It increased our balance sheet by about $130 billion during the quarter to serve them. And lastly, it also included returning $8 billion in capital to our shareholders before suspending our share repurchases to ensure that we had the capital to continue to grow the balance sheet to help these companies deal with the virus. Our dividend remains unchanged, supported by a strong balance sheet. This morning, your Board of Directors declared a dividend of $0.18 per share payable on June 26, 2020, to shareholders of record as of June 5, 2020. We ended the first quarter with strong capital and over $700 billion in liquidity, a higher level than we began the year. During the quarter, your technology and operations team helped us manage through many record volume days across all our platforms, even while changing the operating platform from a work in the office to work at home. These platforms, both through the $30 billion of technology investments our company has made over the last decade, are serving our customers well. We are well positioned to support our clients and deliver for you. This is a direct product of our decade-long focus on responsible growth. We are in a war against COVID-19, and we're doing our part by living our purpose. We're helping people manage their financial lives for this crisis. My teammates know that they're playing a critical role for our 3 groups of clients: people, companies of every size and institutional investors. They provide critical services to keep the economy moving while it fights the virus. We're helping in many ways by executing the federal government relief programs and through our own actions and programs. Let me talk a little bit about some of the things we're doing. With respect to the government relief programs, the Paycheck Protection Program, so-called PPP, is a federal government program administered by the Small Business Administration. We're the first financial institution to begin executing on the program 2.5 weeks ago. We have received 390,000 applications so far from more than $50 billion of SBA loans. We're among the top 10 participants in the program at the time when the program closed last week. We have processed and funded thousands of applications worth billions of dollars, and those have gone out to our customers. As you know, since midday April 16, the SBA has been unable to provide additional loan approvals because the $349 billion initial allocation by Congress has been fully committed. Yesterday, the Senate approved more funds, and we welcome that and would urge the passage of those funds during this week. Some estimate that the need for this program could be as high as $1 trillion. Be that as it may, we just continue to process the thousands -- the hundreds of thousands of applications, but we can't proceed to submit them until the SBA reopens. Even if Congress completes the additional funding, it may not be enough to fill the demands, but we're ready to go. We have hundreds of thousands of loans ready to go, and we'll start submitting them as soon as the door opens. With respect to Economic Impact Payments, so-called EIP, we have worked with the Treasury Department and industry to help smooth -- to ensure a smooth process, including as many payments as possible went directly to individuals via electronic means, which is the safest and fastest way. To date, we processed more than 8 million of those payments. We aren't making any reductions in those payments for negative balance accounts or overdrafts, letting go right through to the customers as they're intended to do. For those who receive paper checks, we encourage them to continue to use our digital means of deposit to save them time and effort and keep them even more safe. Despite that, if they need to go to the branches, our 3,000 branches -- 3,000 of our branches remain open with drive-up ATM services and tellers and our teammates all there ready to help but practicing strong physical distancing, masks for the staff, ongoing deep cleanings and other steps consistent with CDC guidance so that our teammates can continue to serve the public. Many of our teammates are leading in this effort to serve the public, including daily engagement with our clients, whether it's in our financial centers, which all remain -- which remain open, but through proactive calls and emails, our financial advisers are making to their clients the guidance through the market turbulence or the capital and liquidity providing the companies across all our businesses. To be able to do this, we had to have a great team in place. And our first priority since the crisis has begun was to address the health and safety of those teammates and continue to do all we can to protect them. First and most importantly, we ensured there would be no layoffs in our company during 2020 and taking away one of the core concerns by our teammates. We're providing special compensation for teammates in our financial centers, in our operations centers, in our call centers and the managers of those centers. We hired more than 2,000 teammates across the company in March to better serve our customers. And by the way, in the first few weeks of April, we've added 1,600 more. Our previously announced $20 an hour minimum compensation at Bank of America has been in effect since March. We told all our new hires, those young kids coming out of college who are facing uncertainty, whether for summer internships or for permanent positions in the fall, that all of them would have a job with us, and we have lived up to commitments to hire them. That's 3,000 summer interns and college graduates. We have taken extensive measures to help keep our teammates safe. We have established multiple locations for important work of our trading operations and call center platforms. We have enabled social distancing in our facilities by moving more than 175,000 people to work from home over the last 6 weeks. That means ensuring they have appropriate tools and resources and have the appropriate control protocols. To give you a sense of what that took, we deployed 90,000 laptops alone in the past 60 days. We took a lot of important actions in the past couple of months. First, we also asked high-risk teammates to identify themselves well over a month ago and move them to work-from-home status immediately without penalty to them in any way. We moved quickly to assure social distancing in our financial centers, installed protective barriers, posted health care professionals in our operations and trading environments in order to make sure those teammates had access to health care at any time. We're also supporting our -- the physical and emotional wellness of our employees and their family members. We're helping teammates, who are in stay-at-home orders like all of us are, get access to medical care and behavioral health providers remotely by expanded access to our free Teledoc consultants who are making these employees to get caregiver assistance so they can work when their kids are home from school or daycare. Our life events services team provides teammates some personalized support, resources, tools and access to benefits and for those that are sick are helping them monitor their health. Taking care of the employees is not only the right thing to do, it enables -- but it enables each of them to play the important role they must play to help keep the critical services we provide to the economy in place. We are doing that and providing those services in many ways. In addition to keeping 3,000 of our financial centers open and functioning every day, we're doing more to help our clients, consumers who are struggling to make their payments or calling the bank or using our digital platform to make deferral requests on loans to get fees -- or to get fees waived. As another disruptive event such as a hurricane or a storm or snowstorm or other events, we continue to work with them. Since this crisis began, we have granted over 1 million requests for assistance to defer payments. However, we've seen the volume of those deferrals been reduced in the last couple of weeks. We're also providing relief to our communities. We committed $100 million to support and address pressing needs related to food and security, medical response efforts in support of vulnerable populations. Another way we're helping is providing $250 million in additional capital, that's on top of the $1.5 billion we already provide; and $10 million in philanthropic grants to community development financial institutions, so-called CDFIs, who can make loans in local communities. That includes minority-owned banks across the country. We've lowered our matching gift minimum to $1 so employees across the whole company can contribute to help these great institutions. And finally, to help children who are learning at home, we partnered with Khan Academy to help us scale the programs and initiatives that that great institution has to help educate people at home. So as you can see, it's been a strong effort at the client -- teammate level, at the client level, changing the work-from-home posture by our team, and I'm very proud of what they've done in this crisis. To summarize, America and the world are fighting a war against the virus. Bank of America has motivated tremendous resource to help fight that war. When the health care crisis ends, the economic challenges will begin to subside, and we'll be here throughout that crisis and beyond to support our clients, our customers, our teammates and our shareholders. Now let's move forward with the core part of the meeting. We're going to begin with a few remarks from our Lead Independent Director, Jack Bovender. We'll then consider the proposal to be voted during the meeting. We'll also answer questions from shareholders, which can be submitted now in our virtual meeting website. Please indicate if your question relates to one of the proposals to be voted upon, so we can answer it before the polls close. Following adjournment of the formal meeting, we have reserved up to 30 minutes to address general questions from shareholders about Bank of America. We will provide you with preliminary voting results before concluding today's meeting. For financial or business matters relating to your accounts, I encourage our customers to contact our customer service representatives directly for personalized assistance. So today, we're joined by our Board of Directors: Sharon Allen; Sue Bies; Frank Bramble; Pierre de Weck; Arnold Donald; Linda Hudson; Monica Lozano; Tom May; Lionel Nowell; Denise Ramos; Clayton Rose; Mike White; Tom Woods; David Yost; Maria Zuber; and importantly, our Lead Independent Director, Jack Bovender. Jack has been a director since August 2012 and Lead Independent Director for your company since October 2014. Jack plays a key role in our shareholder engagement process, representing our Board of independent directors in many, many investor meetings. So first, we're going to hear a few remarks from Jack. Jack?

Thank you, Brian. Good morning, and welcome to our 2020 meeting. On behalf of all the independent directors, thank you for your continued investment in Bank of America, and thank you for joining our call today. You have our 2019 annual report and proxy statement. Brian's letters and the presentations from other members of senior management provide a good overview of how the company performed in 2019. If you have not already done so, I encourage you to read about that in the report. Of course, the world has changed significantly since we published our annual report. Through the period since then, the independent directors have engaged regularly with Brian and the leadership team as the company has navigated the economic and market impacts of this global health crisis. I also continue to meet regularly with shareholders to gather their viewpoints and to discuss governance matters with them. This provides the Board with valuable perspective and insight. The responsible growth approach that Brian and the management team have executed for many years has positioned Bank of America for resilience and performance during stress. We did not know the nature of the stress conditions we would one day face as the responsible growth framework was developed and implemented, but we are in such a moment now. Thank you again for joining us today and for your investment in Bank of America. I wish you the best. Stay safe.

Thank you, Jack. I'd like to ask Ross Jeffries, our Corporate Secretary, to review the meeting rules and present the Corporate Secretary's report. Ross, please?

Thank you, Brian. As Brian noted, we'll consider the 7 items for shareholder vote: 3 management proposals and 4 shareholder proposals included in our 2020 proxy statement. Shareholder proponents will have up to 3 minutes to discuss their proposals. After the proposals have been presented, we will close the voting, tabulate the votes and announce the preliminary voting results. Again, shareholders may submit questions on the annual meeting website. Similar or related questions may be grouped and answered together to avoid repetition. To allow us to answer questions from as many shareholders as possible, we will limit each shareholder to 3 questions. You may vote the shares you hold through the virtual meeting website until the polls are closed. However, if you've already submitted your proxy to vote on these matters, you do not need to vote again, unless you want to change your vote. Notice of today's meeting and the related proxy materials or a notice of Internet availability of these materials were mailed beginning March 9, 2020, to all shareholders of record as of March 2, 2020. A supplemental notice of today's virtual meeting was filed with the Securities and Exchange Commission in a press release made on April 9, 2020. [ Deborah Baker ], a representative of Broadridge Financial Services, has been appointed inspector of election and is participating in today's meeting by phone. She has advised me that holders of shares representing at least 85% of the shares entitled to vote are present in person or represented by proxy, which constitutes a quorum. Brian?

Thank you, Ross. I declare that a quorum is present. The meeting is now convened. I would like to take a moment to recognize our Bank of America teammates who are serving as proxies for today's meeting. They are Faiz Ahmad, our Head of our Global Transaction Services Business; and Holly O'Neill, who is our Client Care Executive for our Consumer Banking and Wealth Management Business. Thank you, Faiz and Holly, for joining us today by phone. Also joining us by phone today is Lisa Sawicki, a representative from our registered public independent accounting firm, PricewaterhouseCoopers. We're now ready to consider the 7 items that are up for shareholder vote. The polls are now open to vote on these proposals. The management proposals are, number one, to elect our director nominees; number two, to approve our executive compensation through an advisory nonbinding say-on-pay resolution; and number three, to ratify the appointment of PricewaterhouseCoopers as the company's independent registered public accounting firm for the year 2020. There are 4 shareholder proposals that are also included in the proxy statement to be presented. The first shareholder proposal relates to proxy access and was submitted by John Chevedden. Mr. Chevedden is on the line to present his proposal on proxy access. Mr. Chevedden, you have 3 minutes. And after 3 minutes, we'll go to the next proposal. Mr. Chevedden, please go ahead.

This is John Chevedden. Can you hear me okay?

Yes, sir, go ahead.

This is proposal 4: make shareholder proxy access more accessible. Shareholders request that our Board of Directors take the steps necessary to enable as many shareholders as may be needed to combine their shares to equal 3% of Bank of America stock owned continuously for 3 years in order to enable shareholder proxy-access director candidates. At the outset, it is important to make the point that management does not want a level playing field in dialogue with shareholders. Each shareholder proposal is limited to one block of text of no more than 500 words. Management, meanwhile, takes advantage of a rude, negative introduction to the shareholder proposals has no limit on the number of words in its opposition statements and even has executive summaries to go with his long-winded opposition statements. Management also spend shareholder money on distributing glossy advertisings opposing the shareholder proposals. Proxy access for shareholders enables shareholders to put competing director candidates on the company ballot to see if they can get more votes than management director candidates. A competitive election is good for everyone. This proposal can help ensure that our management will nominate directors with better qualifications in order to giving -- in order to avoid giving shareholders a reason to exercise their right to use shareholder proxy access. Under our current highly restricted shareholder proxy access process, if 20 shareholders combined hold $8 billion of company stock and they are then $1 short of owning 3% of company stock, they are totally disqualified in nominating a director. They cannot ask a 21st shareholder to then join their ranks. The largest shareholders of Bank of America can be the least likely shareholders that use shareholder proxy access to nominate director candidates. It can be more complicated for large shareholders to use shareholder proxy access. There is a growing awareness of this reality. Under this proposal, it is unlikely that the number of shareholders who participate in the proxy access director nomination process would still be a modest number due to the administrative burden on shareholders to qualify. Plus, it is quick and easy for management to reject proxy access applications. The administrative burden on shareholders through the dense Bank of America rules on shareholder proxy access leads to a number of minor disqualifying errors by shareholders, and management can easily detect and reject these. Please vote yes, make shareholder proxy access more accessible to shareholders, proposal 4.

Thank you. The next shareholder proposal relates to shareholder action by written consent and was submitted by Mr. Kenneth Steiner. Mr. Chevedden will also present this proposal on behalf of Mr. Steiner. Again, Mr. Chevedden, you have 3 minutes and then we'll stop and go to the next proposal. Please go ahead.

John Chevedden. Can you hear me okay?

Yes.

Okay. This is proposal 5: adopt a new shareholder right written consent. Shareholders request that our Board of Directors take the steps necessary to permit shareholder written consent by the shareholders entitled to cast the minimum number of votes that would be necessary to authorize an action at a meeting at which all shareholders entitled to vote thereon were present and voting. Hundreds of major companies enable shareholder action by written consent. This proposal topic won majority shareholder support at 13 large companies in a single year. This included 67% support at both Allstate and Sprint. This proposal topic also won 63% support at Cigna in 2019. This proposal topic would have received higher votes than 63% to 67% votes at these companies if more shareholders had access to independent proxy voting advice. The right for shareholders to act by written consent is gaining acceptance as a more important right than the right to call a special meeting. This also seems to be the conclusion of the Intel shareholder vote at the 2019 Intel Shareholder Meeting. The directors at Intel apparently thought they could divert shareholder attention away from shareholder written consent by making it easier for shareholders to call a special meeting. However, Intel shareholders responded with greater support for written consent in 2019 compared to 2018. Written consent also won 45% at The Bank of New York Mellon in 2018. In response to the 45% vote, The Bank of New York Mellon said it adopted written consent in 2019. Unlike Bank of America, The Bank of New York Mellon did not insist that its shareholders choose between a right to call a special meeting and a right to written consent. Bank of America is trying to convince its shareholders that they should settle for a less robust corporate governance than The Bank of New York Mellon. The 2019 Bank of America proxy said that shareholders who want to act between annual meetings by using written consent and who lack the deep pockets of Bank of America should be forced to depend upon input from all shareholders. Meanwhile, Bank of America, with its unlimited deep pockets, disingenuously highlighted that Bank of America focuses on input from only its top 250 shareholders. Written consent won 44% support at Capital One Financial Corporation in 2018, and this increased to 56% support in 2019. Written consent also won 47% support at United Rentals, Inc. in 2018, and this increased to 51% support in 2019. Please vote yes, adopt a new shareholder right, written consent, proposal 5.

Thank you. The next shareholder proposal relates to gender and racial pay equity and was submitted by Lee E. and Helen Johnson and George Jenne. Ms. Natasha Lamb of Arjuna Capital has prepared a prerecorded statement on this proposal, and we'll present this proposal on behalf of the proponents.

Good morning. My name is Natasha Lamb, and I move proposal #5 on behalf of Arjuna Capital asking for a report on gender and racial pay equity. On its face, Bank of America has taken an important first step by publishing statistically adjusted pay parity numbers, assessing the pay of many women performing similar jobs and the pay of minority and nonminority employees performing similar jobs in the United States, yet this statistically adjusted pay parity reporting is only half the story. The other half is median pay disclosure, which is the objective of this proposal. Pay gaps are comprised of 2 parts: equal pay for your current job versus peers and equal opportunity to high-paying jobs. Median pay gaps reflect a lack of equal opportunity by measuring whether women and minorities are holding as many high-paying jobs. The gender pay gap is literally defined as the median pay of women working full time compared to the median pay of men. Women in the U.S. make $0.82 on the dollar on this basis. African-American women make $0.62 and Latina women make $0.54. Median pay gaps are considered the valid way of measuring pay and equity by the U.S. Census Bureau; the Department of Labor; the Organisation for Economic Co-operation and Development, the OECD; and the International Labour Organization, the ILO; not to mention the United Kingdom, which now mandates disclosure of median pay gap. To choose to ignore median pay gaps and for the Board to label them "misleading and counterproductive" is a disservice to the group these pay gaps affect. We can see Bank of America's pay gaps in the U.K. because they are mandated. Our company reported a 29% hourly pay gap and a 55% bonus pay gap for its U.K. operations. But notably, our company has not published median information beyond the U.K. Yet companies like Citigroup, MasterCard and Starbucks are already showing leadership by publishing their median pay gap data globally. These disclosures can improve performance and provide a baseline for measuring progress moving forward. A 2019 study in the Harvard Business Review found that wage transparency in countries that mandate it narrowed the median wage gap. There are many ways to shrink gender and racial pay gaps at a company: improving diversity, ensuring statistically adjusted pay parity, advancing women and minorities into positions of leadership, but the only benchmark to measure whether the pay gap is actually shrinking from these various levers is to publish the pay gap itself. Thank you for your time as we firmly believe our company is best served by a transparent and fulsome accounting of pay equity.

The next and final shareholder proposal relates to the Business Roundtable's Statement of the purpose of a corporation and was submitted by Harrington Investments. Brianna Harrington is on the line to present this proposal. As a reminder, you have 3 minutes for the proposal, and then we can proceed. Ms. Harrington?

Yes, can you hear me?

Yes, go ahead.

The statement of the purpose of the corporation signed by our company last August acknowledged what most responsible shareholders already recognized, that other stakeholders are as important as shareholders. This statement was mostly disingenuous, however, because not unlike other public relations announcements, the statement is not a mandatory fiduciary duty in the company's governance documents and provides no policy. We are in crisis and, as stakeholders, need a forceful comprehensive plan on how Bank of America is going to provide leadership to this country on how to battle the coronavirus COVID-19 pandemic and support our stakeholders. We're specifically looking at the bank's statement to support the communities in which we work. We respect the people and our communities and protect the environment by embracing sustainable practices across our businesses. Bank of America Board of Directors should immediately monetarily commit to employees -- to commit to employees for a livable wage and full health care for all employees, working or furloughed; reduce or eliminate dividends, stock buybacks and executive bonuses until our economy recovers; expand affordable financial assistance to those communities that are most in need of our help, including our customers who are unemployed; halting the practice of check ordering; and eliminating excessive overdraft fees; as well as end the practice of turning over customer information to check systems, which can destroy a person's credit for up to 5 years; eliminate corporate tax havens, shelters and state and local tax expenditures our company utilizes to reduce its fair share of taxes necessary for the public sector to fully fund important government health and human services in this pandemic; help funding for lobbying and political campaigns and focus the bank's attention on funding organizations to provide food, medicine, shelter and other forms of assistance to the unemployed; lastly, amend our bank's governance documents to specifically delineate how it will treat all of our constituents as stakeholders, including shareholders. Looking at our company's government bailout in the last Great Recession, Bank of America paid out $82 billion in government fines and penalties. And this bank, from 2016 through 2019, loaned over $157 billion in fossil fuel financing, driving multigenerational climate change, which is certainly inconsistent with our pledge to stakeholders to protect the environment by embracing sustainable practices across our businesses. Over 22 million Americans have lost their jobs, and 1/2 of U.S. households have no emergency savings. Americans are our customers, our depositors, holders of Bank of America credit cards and small business owners. This bank will not -- will be judged not on what it says about shareholders and stakeholders but what it does for all Americans as stakeholders. Thank you.

Thank you. We'll now respond to questions from shareholders on the proposals. I'm told that we have no proposal questions, so we are going to move forward to the next section here. Since there are no questions, I now declare the polls are now closed. And I'd ask Mr. Jeffries to report the preliminary results of the voting here today at the annual meeting. Mr. Jeffries?

On the following preliminary results, all 17 director nominees have been duly elected to the Board of Directors. The advisory vote on executive compensation has been approved, and the appointment of PricewaterhouseCoopers has been ratified. None of the shareholder 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 4 business days of today's meeting.

Thank you, Ross. And that completes the official business of the meeting, and the formal meeting is now adjourned. As I said earlier, we're now going to answer questions about Bank of America that was submitted by our shareholders. As a reminder, the rules of the meeting remain in effect. If you have questions about a business matter or other matter relating to your personal accounts in relationship with the bank, I encourage you to go to the link or phone number in the rules of meeting to get that direct personalized assistance. If we don't have time to answer your questions during today's meeting, we're going to -- please contact us directly through our Investor Relations website. And I said -- as I said earlier, for the convenience of all, we're going to take 30 minutes of questions. And so the way we're going to do this, as I mentioned earlier, is that Lee McEntire; Ross Jeffries; and David Leitch, our General Counsel, are going to -- have been going through your questions, and now we'll read those questions aloud, and then we'll answer them or either I'll answer or my teammates will answer them. So let's start the first question, please.

Brian, the first question is, how much was spent on stock buybacks in 2019?

So the question is -- we returned $28 billion approximately in stock repurchases in 2019 and $6 billion in dividends, and I think the important thing is to recognize why we could do that. We earned $29 billion after tax. We're able -- we came into 2019 with a capital position far in excess of regulatory minimums and actually as of the end the first quarter still maintain 100 basis points plus over regulatory minimums. But the important piece of that question that's often inherently built into it is, why wouldn't you spend that money on other items? So during the course of 2019, we paid our third round of bonuses to the 100,000-plus teammates in the company. 95% of teammates actually in the company, almost 200,000 teammates received special bonuses, bringing the 3-year total to $1.6 billion. We announced and in fact have now raised our minimum starting wage to $40,000 a year for every job in the company or better, and so that's gone into effect. We continue to run a robust set of employee benefits, including many things that we've talked about earlier, including mental health care, unlimited mental wellness calls and things like that. And so at the same time, we invest in the businesses. We hired 4,000 people to work with our clients and customers. We hired -- we added new branches in many cities, which we hadn't had coverage in before, and we continue to do that even in the crisis now because the construction in many cities can continue. We also invested another $3 billion in technology platforms, some of which are critical to what we're providing today in terms of our digital capabilities that are second to none across the platform, especially the enhancements we made across our commercial businesses to allow the commercial customers to function from home and the amount of work going on in, what we call, CashPro is just tremendous that we've seen during this period of time when people are working from home. So the question is, did we invest in our teammates? Yes. Did we invest in our businesses? Yes. And on top of that, we also moved to a $400 billion environmental commitment for -- from $150 billion we completed. On top of that, we also contributed our $250 million of annual charity work. And on top of that, we invested about $50 billion in terms of loans and activities related to measures which meet the UN Sustainable Development Goals. So we were able to buy back stock and -- and if you'll read the annual report, you'll see that and it was right for society showing how capitalism can actually drive the solutions in the world. Let's go to the next question.

The next question is, how does the current crisis that we all find ourselves in compare to the 2008, 2009 financial meltdown? And then secondarily, how is the bank positioned this time versus the last? And have -- how many shareholders have hung in there with this firm, both then and now?

So if you look at the simple facts and if you looked at our first quarter earnings announcement, we've given you the statistics from the end of '09 to now in terms of capital liquidity and other measures, and so we and the industry are much better positioned in terms of capital and liquidity. And in fact, if you go back to '07, the capital in the industry has more than doubled. At least the liquidity was up multiple times by 4 or 5 times in our company across the industry. And that's why we're there to support our clients. So in the first quarter, to give you a sense, our balance sheet grew by $150 billion because the deposits of clients -- our teammate -- clients placed with us. Our loans grew $70 billion to help corporations meet their obligations as they start into the crisis, and we feel very good about the company's position. And so again -- and in the first quarter, even putting an additional $3.6 billion in our reserves. We earned $4 billion after tax, which is a far different position than when we had to build reserves. The other major point is under responsible growth. The portfolios in our company are much differently positioned, a lot less unsecured consumer credit, a lot more balance in the commercial consumer mix, a lot higher credit standards that we've been driving and a lot less exposure to the mortgage business because of how we decided to only do the mortgage business directly. So we went from a 20% market position to about 5% today. All those things will play to our benefit. Next question.

Yes. So the next question is, recently, the stock market has been affected by the volatility of oil market. Can you please talk about Bank of America's exposure to the oil industry and loan default possibilities?

Well, obviously, the oil industry and prices are going through both the demand side changes and -- meaning that people are using less, and we're seeing that in our consumer purchasing statistics that the oil and gas expenditures and debit and credit cards are down 30% from last year. And so the volume, people are using less. The price is down also for consumers. But at stay-at-home condition, they're not going to be driving around as much, not as many flights are going and other uses of oil and gas, so there's a demand-driven problem. And also there was a price war that was initiated in the middle of this. And so we've seen this before. We saw it in the '14, '15, '16 era when prices fell. We were able to go through that business probably with the portfolio that had more exposure to the types of things that are more -- considered more riskier, i.e., oilfield services and kinds of entities. Our total exposure to the industry is around $18 billion. It's largely dominated by investment-grade companies. All are still accessing capital markets, and we're helping them do that. So we feel very good about it. And in the first quarter, we've put up additional reserves to the gas side of the industry or additional -- took additional charge-offs on the gas side and allocated part of our reserve build to it. So we -- the funded exposure of $18 billion is -- against the $1 trillion of loans is a relatively small part of our portfolio, but the subtlety in understanding that is to understand that, that mix is much more about the largest companies in the business, and what they do is much different even in '15 and '16. Next question.

Yes, Brian. The next question is why does BAC give money to a charity if shareholders vote, which I think is referring to the Water.org contribution that we will make?

Yes. We have started this tradition I think 3 years ago, if I remember right. And why did we do it? We did it to actually to get people to vote, and we believe that it's important. So in 2017, we gave 600 -- that's 4 years. It's the fourth year. 2017, $655,000, representing 655 shareholder account votes. In 2018, that went to the Special Olympics. In 2019, Habitat for Humanity, we donated $919,000 because we got 919,000 accounts were voted. Last year, we had $1 million went to the American Red Cross because about 1 million shareholder accounts voted. This year will be about $1.20 million, we think, to Water.org, meaning 1.20 million accounts voted. So why we're doing this is to get people to vote. And as more people vote, that's good for -- to show that the process among our shareholders is working. We're impressed in the amount of shareholders turn out. So even in a year where we had obviously a different type of situations, I think we got 85-or-so percent of the shares are voted today, consistent with what we had in the past, thinking -- and you got to remember what's going on in society now with stay at home and, et cetera, and people being worried about a lot of other things. So we feel good at the -- the reason why we do this is to provide an incentive for people to vote and do good and vote at the same time. And Water.org is a worthy -- a very worthy charity that we've had a relationship with for many years. Next question.

Brian, the next question pertains to Bank of America more generally. At the outset, I would like to thank the Board and the management to giving assurance on not having layoffs in 2020 and would like to know how Bank of America would support prior displaced employees, specifically those impacted being minorities and potential international employees.

If an employee was impacted before and they can apply for the open positions. As I said, we hired 2,000 people in March. We hired 1,600 so far in April. And so without knowing the individual questioners, whether they're a former employee or not, I'd say that if you have a reason -- if you want to come back and work with the company, the open positions are all posted on our publicly available website, and we'll continue to hire people to replace what we need. Obviously, our turnover rate has gone way down due to the fact that we're a great employer and due to the fact that the conditions outside. So I'd say apply and see what happens. Next question.

So the next question is office buildings and shopping malls have been closed. Many small businesses used their homes as collateral. Are payments on commercial leases and mortgages being paid? If conditions continue, will there be a large increase in foreclosures? What is the status of the CMBS and RMBS markets?

Let's go to the first on the consumer side of this in terms of homes. We announced our consumer assistance programs. As I said earlier, we had 1 million-plus people avail themselves of it. In the mortgage area, we have -- there's both in the CARES Act, there's a requirement with government-guaranteed mortgages to grant payments deferrals, and we're also doing it for our own held-for-investment portfolio. And so -- and we've also announced not only for mortgages but for cars or other things that there'll be no final action taken, i.e. no foreclosures or repossessions and -- during the pendency of the crisis. So that's where we stand. In terms of business side, I think it's -- we'll let -- this will all play out. We are very comfortable with our exposure in commercial real estate. The way we've underwritten under responsible growth for the last decade are with buildings in great shape the -- that we expect people to pay. There may be interruptions and deferrals requested by tenants or landlords. We have the same deferrals come to us. But in our view is as the health care crisis eases and gets behind us, the economic crisis will ease behind that, and we'll get back to business. So there's no -- whether these markets are in temporary disruption because of issues of payment. I think people have to be thinking about long term, but we feel very comfortable with our underwriting standards and what we've done over the last decade that our exposure in commercial real estate market is much more manageable than the markets. Thank you. Next question.

Brian, the next question, how many employees have gotten COVID-19?

We don't get those statistics publicly. And so -- but you should expect our rate, the 200,000 is underneath the national averages. But we have people all over the world, and it's obviously dictated by where they are and what the condition of local market is. But we won't give those statistics publically.

Thank you. The next question is, does Bank of America support the U.S. Chamber in restricting shareholder proposals?

I think the question presumes an answer. But our -- we believe that the shareholder proposal method is something that can be continued to look at to bring it to more current. Most companies do that. But the simple fact is, this year, we had 4 shareholder proposals. Last year, we had nearly as many. And so they come up, and they're handling the ordinary course. Whatever the rules are, we'll follow them like we always have.

Brian, the next question is on climate change, and bear with me, it's got some link to it. The Banking on Climate Change 2020 report released last month shows that Bank of America is the world's fourth-largest funder of fossil fuels. Over the past 4 years, following the signing of the Paris Climate Agreement, which the bank claims to support, Bank of America has provided at least $157 billion in lending and underwriting to the fossil fuel industry. These investments are directly fueling the global climate crisis and putting communities and millions of lives in danger. Bank of America's investments are still nowhere close to being aligned with the goals of the Paris Agreement to keep global temperature rise well below 2 degree Celsius. It's not enough to talk about your funding for clean energy. We are facing a climate crisis, and that requires banks to stop making the problem worse. What is Bank of America's plan to phase out its investments in fossil fuels and align its investment portfolios with the goals of the Paris Agreement?

Well, everybody has a way -- thank you for the question for the questioner, but let me just talk about what the company is doing. We believe that we have to help make the transition from the current situation to the situation we all need. We are an industry leader of high import across our industry and across all industries to help get the commitment to carbon neutrality by other companies in the world, which we have been leading. Our company is carbon-neutral today. We are an industry leader in helping develop clean energy sources across the world with a $400 billion financing commitment with tens of billions of dollars are done in 2019 and continue to go on, and we'll continue to drive that. We're a believer in that. We have to help companies make the commitment to carbon neutrality, help them, finance them to help make the transition themselves whatever industry they're in. And that's where we believe our energies and efforts should be, and that's where we're driving it. We have published our requirements under all the different measures out there, and we can go on and on with the different things we've done. And we have raised green bonds to help drive it. We've issued our own green bonds. We've made -- as I said, we're carbon neutral. The $400 million (sic) [ $400 billion ] is out there because we used up $150 billion so far. Next week, we will issue our first report under the TCFD framework which we'll report under SASB later this year. So our materials and information is out there, but we believe our job is to help make the transition happen. And that's what we're trying to do. Next question.

Yes, Brian. What's been done to better promote through social media that customers can open a free, self-directed brokerage account through Merrill through the bank?

We continue to advertise our capabilities across the broader thing. We're not trying to build a stand-alone -- and Merrill Edge is a stand-alone business. It's part of the core way we go after the 4 or 5 core needs for customers and -- but the broad consumer in America. So our 60 million customers and our 2 million plus in Edge are really trying to get people who can see the value in having all their services in one place, their deposit account, their borrowing accounts and their investing accounts. And that's what we're driving at. So broad-based advertising, just to see if we can gather accounts without substance below them in terms of the assets in combination of the Preferred Rewards program that the customer can get the great benefits of Bank of America, are not what we drive. Yet on the other hand, we're going as fast as anybody and it's a core part of what we do. So I'm not sure I'd focus on what we're advertising in social media and stuff. What we're doing is driving a customer base, and the penetration is growing faster than the market. Next question.

Yes. The next question really is very lengthy, Brian, so I won't read the entirety of it, but it refers to Arctic drilling. And there are a number of our U.S. peers that have updated their policies to prohibit funding for Arctic oil and gas. Does -- Bank of America is one of the last major American banks to not take action yet. So the question is, will we take an action?

I think that that's a specific part. I gave you the general response earlier on what we're doing from an environmental standpoint. I'm going to ask Andrew Plepler, our Head of ESG, who is on the line, to kind of give you the discussion on Arctic drilling. So operator, could you open Andrew's line?

I'm here, Brian. Thanks for the question. I think Brian laid out philosophically where we are on climate change and where we are in our obligation to drive the transition to a low-carbon economy and to achieve the goals of the Paris accord. I think philosophically, we believe that client engagement is the way to go. We don't think that these sort of binary decisions on specific issues are the way to really drive us forward on the larger goals and objectives. So we will be very transparent. Brian mentioned that we're releasing the TCFD report in the next week. We will be transparent with all of our stakeholders. We meet with environmental advocates constantly on these issues. We think that it's a complicated conversation, which we fully acknowledge, but we look forward to the engagement. And we recognize our responsibility to drive the transition, and that's what we're focused on in a comprehensive way.

Okay. Next question.

So Brian, I have 3 questions left, but 2 of them refer to the number of people on this line which we will find out post this in a summary. And then we also have a question about how many -- the number of questions, and we have responded to all of the questions at this point. So the last question that I actually have is the -- can you announce before the end of the meeting whether the vote on executive pay was higher or lower than in 2019? And again, we won't have the answer to that until all the final votes are tabulated. But I think it is in our proxy material that, last year, that vote was roughly 96% and has averaged 95% or so over the past 3 years. So that really -- that ends all the questions that I have.

Okay. So we will publish the exact vote totals on the 8-K within 4 days, Ross, as we said earlier, correct, and then those figures as we have done every year. All right. No other questions. At this point, since there are no further questions, this concludes today's meeting. On behalf of Jack Bovender, our Lead Independent Director, the rest of our Board of Directors and our management team, thank you for being a shareholder in our company, and thank you for your support of our company. We look forward to seeing you next year. Thank you.