Marcato Capital Management Calls For Leadership Change At Bank of New York

SAN FRANCISCO, March 10, 2015 /PRNewswire/ -- Marcato Capital Management LP ("Marcato"), a San Francisco-based investment manager that beneficially owns approximately 1.6% of the outstanding shares of The Bank of New York Mellon Corporation (NYSE: BK), today released its analysis of the company and its conclusion that meaningful leadership change needs to take place in order to create significant, long-term shareholder value. The letter and presentation can be viewed at www.ABetterBankOfNewYork.com.

Marcato is one of BK's largest investors and encourages all of its fellow shareholders to review the letter and presentation carefully and, if they find the content compelling, to reach out to the board and voice their support for leadership change.

A full text of the letter follows:

March 10, 2015

Wesley W. von Schack
The Bank of New York Mellon Corporation
Church Street Station
P.O. Box 2164
New York, New York 10008-2164
Attn: Non-Management Director

Wes,

As you know, funds managed by Marcato have been sizeable shareholders of Bank of New York Mellon for much of the past year.  In that time, we have had the opportunity to discuss the company and its prospects with senior management, members of the board of directors, numerous large shareholders, and prominent research analysts.  Having had a number of these discussions over the past six months, we are writing today because we have serious concerns that members of the board and management do not share the sense of frustration and desire for change that is felt by many shareholders, including ourselves.  We believe that meaningful improvement will not occur without meaningful change in leadership and that starts with the CEO.

Bank of New York Mellon is simply not achieving its potential.  This is most easily observed by the persistent failure to achieve long-range earnings targets.  Evidence of underperformance is also observable across a broad range of key performance measures including headcount growth, controllable expense levels, assets under custody growth, and investment servicing revenue growth.  This management has both failed to reach its own goals and failed to keep up with key performance indicators of the competition.  While there are aspects of the external environment that have created headwinds for the company's earnings power, competitors face similar challenges and yet are proving much more adept in navigating the marketplace.  

The long-range targets put forward by management at the October analyst day were unresponsive, unambitious and uninspiring.  These tepid goals give further evidence that this leadership does not recognize the magnitude of inefficiency at the company or the opportunities to drive growth and has little appetite to take the necessary actions to ignite real change.  Given the unusually long tenure of this leadership group, we doubt that meaningful progress will be achieved without new executive talent.  It is not the board's role to micromanage the organization, but it is the board's responsibility to set appropriate goals for the business and hold management accountable for failure to meet those goals.  It is time for the board to exercise this responsibility.

We are including a presentation that details our analysis and conclusions on these topics.  We are invested in the Bank of New York Mellon because we believe it has a strong franchise in an increasingly important and valuable part of the global capital markets.  With the right leadership in place and the right goals, we believe that the Bank of New York Mellon can deliver more effective services to clients, play a critical role in monitoring and managing risk for the market, and deliver significant value for shareholders.  We would be happy to discuss our analysis at a time and location that would be convenient for the board.

Sincerely,

Mick McGuire

cc:
Nicholas M. Donofrio
Joseph J. Echevarria
Edward P. Garden
Jeffrey A. Goldstein
Gerald L. Hassell
John M. Hinshaw
Edmund F. "Ted" Kelly
Richard J. Kogan
Michael J. Kowalski
John A. Luke, Jr.
Mark A. Nordenberg
Catherine A. Rein
William C. Richardson
Samuel C. Scott III

SOURCE Marcato Capital Management LP

WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?

440k+
Newsrooms &
Influencers

9k+
Digital Media
Outlets

270k+
Journalists
Opted In

GET STARTED