CalPERS Presses Bank of America to Fire PwC

(May 7, 2014) – The California Public Employees’ Retirement System (CalPERS) has voted for Bank of America to discontinue its 56-year relationship with auditor PricewaterhouseCoopers (PwC).

In late April, Bank of America admitted its calculation of regulatory capital requirements was “incorrect” and had to resubmit its 2014 capital plan. The Basel III-compliant capital ratios it originally came up with were off by between 27 and 29 basis points, according to the financial firm.

The pension giant was less than impressed with these errors, and voiced it dissatisfaction in a proxy vote counted at the bank’s May 7 shareholder meeting in Charlotte, North Carolina.

“CalPERS is voting against PricewaterhouseCoopers as their tenure extends over the period of the recent accounting errors,” the organization said in its proxy statement. “We note PwC has been the company’s auditor since 1958.”

CalPERS was unsuccessful in its bid to remove PwC as auditor: the majority of shareholder votes supported ratifying the relationship. Indeed, investors passed all of the corporate board’s recommendations and nominees and voted down all shareholder proposals.

The public pension—America’s largest—owned nearly $500 million in Bank of America stock (39 million shares) and $84 million worth of its corporate bonds as of the end of last June, according to its annual report. Still, with a market capitalization of more than $155 billion, CalPERS owns less than a third of 1% of the financial giant.

PwC earned $104 million from Bank of America for its audit and tax services in 2013 and $115 million in 2012.