U.S. Securities and Exchange Commission
Washington, DC 20549
NOTICE OF EXEMPT SOLICITATION
1. Name of the Registrant:
THE BANK OF NEW YORK MELLON CORPORATION
___________________________________________________________________________
2. Name of the person relying on exemption:
CTW INVESTMENT GROUP
___________________________________________________________________________
3. Address of the person relying on exemption:
1900 L STREET, NW, SUITE 900 WASHINGTON,DC 20036
___________________________________________________________________________
4. Written materials. Attach written materials required to be submitted
pursuant to Rule 14a6(g)(1):
CTW INVESTMENT GROUP
March 27, 2012
Dear fellow BNY Mellon shareholders:
With the annual shareholders' meeting two weeks away, we are urging support
for the shareholder proposal calling for an independent chairman of the
board at Bank of New York Mellon (BNY Mellon). Currently, BNY Mellon(s
CEO, Gerald L. Hassell, also serves as Chairman. Ensuring independent
leadership of the board is vitally important in light of the numerous
lawsuits filed against the company alleging fraud in its foreign exchange
business in an amount up to $2 billion. Critically, independent board
leadership helps instill the kind of culture of oversight and
accountability which we believe guards against the types of fraudulent
practices alleged to have occurred at BNY Mellon. That these practices
were considered "business as usual" for the better part of a decade in a
major business unit suggests a failure of board oversight that must be
rectified immediately to stem further losses of clients. The residual
effects of the litigation and the allegations therein are already being
felt.
Just last week, BNY Mellon was dropped as the international custodian for
the $9.9 billion Ohio School Employees Retirement System following concerns
about the alleged fraud and the pending lawsuits.
The CtW Investment Group works with pensions and benefit funds sponsored by
unions affiliated with Change to Win, which collectively hold over $200
billion in assets. These funds own an estimated 6 million shares of BNY
Mellon.
Over the past several months, state attorneys general from New York,
Virginia, Florida, Ohio, Massachusetts, as well as a group of public pension
funds in California, and the U.S. Justice Department have all brought
separate civil actions against BNY Mellon for allegedly defrauding public
pension funds and other clients who established "standing instruction"
foreign exchange arrangements with the bank. The potential liabilities are
material; the New York Attorney General, Eric Schneiderman's suit seeks
restitution of what it says is the $2 billion BNY Mellon earned over ten
years through the alleged FX fraud.
Strong independent leadership of the board of directors sends a message
that the board is deeply committed to oversight of the business and its
risk management practices. Without a strong independent Chairman, we fear
client and investor confidence could continue to erode, exposing the
company to further losses should the board not act to set the appropriate
tone at the top. We encourage shareholders to vote in favor of the
proposal, submitted by the Trowel Trades S&P 500 Index Funds, at BNY
Mellon's annual shareholder meeting on April 10, 2012.
The proposal has already gained the support of leading proxy advisor,
Institutional Shareholder Services. In the report released March 22nd, ISS
concludes that the company(s current practice of having a lead independent
director is inadequate, stating "the lead director's duties do not
constitute an effective counterbalance to the CEO/chairman's authority."
1900 L Street NW, Suite 900 Washington, DC 20036 330 W. 42nd Street,
Suite 900, New York, NY 10036
202-721-6060
www.ctwinvestmentgroup.com
In an environment where Wall Street firms are increasingly seen as putting
the company's interests ahead of clients', we believe it is imperative to
reinforce the board(s independence from management so confidence can be
restored in the governance and oversight process. In our view, this is
best achieved by moving away from a model, as the bank has now, that
concentrates decision making authority in a single individual, and toward
one that empowers an independent director to take full leadership of the
board.
While the company defends its current structure, emphasizing the role of
the lead independent director, we remain unconvinced that this is
sufficient to mitigate the risks of lapsing into a CEO-dominated
board. With the heightened regulatory scrutiny and potential fallout from
litigation that are currently troubling the company, we believe appointing
an independent chair is a necessary first step in ensuring more proactive
oversight of these legal risks and stemming any further loss of faith by
clients. As such, we urge shareholders to vote in favor of the shareholder
proposal calling for an independent chair at BNY Mellon.
Sincerely,
William Patterson
Executive Director