2000-2001 Shareholder Resolution Campaign

FleetBoston

Executive Compensation Review

WHEREAS, despite record profitability in the last decade, U.S. corporations have laid off record numbers of workers, arguing that cost-cutting is one key to long-term competitiveness and increased profitability;

WHEREAS, a 1992 study by the Haas School of Business at the University of California at Berkeley found that firms with the widest pay gaps experienced lower quality. A study published in the Journal of Organizational Behavior found that high levels of executive compensation generated cynicism among white collar employees;

WHEREAS, FleetBoston announced the layoff of 4,000 workers, representing 14% of the company’s workforce. Within days of the layoff announcement in early 2000, FleetBoston announced that CEO Terrance Murray received a 13% increase in cash compensation and a special bonus of $20 million for completing the BankBoston merger;

WHEREAS, we believe that asking employees to sacrifice, while at the same time rewarding executives, sends a mixed message to employees, customers and shareholders. We believe that business success over the long term is enhanced when business is viewed as a shared enterprise in which both the rewards and sacrifices are equitably shared among all employees;

WHEREAS, positive employee morale and strong employee training programs contribute positively to employee productivity and good customer service;

WHEREAS, strong customer service is a key competitive issue, necessary for sustained business success;

WHEREAS, leading companies such as Bristol-Myers Squibb, IBM, Eastman Kodak and Procter & Gamble tie a portion of executive compensation to meeting key employee and customer service objectives;

RESOLVED, shareholders request that the Board institute a special Executive Compensation Review which shall: 1) evaluate the merits of adding customer, employee and community satisfaction surveys as factors in determining a portion of executive pay; and 2) consider whether adopting a policy of freezing executive pay during periods of significant downsizing would improve employee morale and improve customer service. A summary of this review, including any recommended changes in executive compensation policy, shall be available to shareholders within six months of the annual meeting.

SUPPORTING STATEMENT

In the competitive financial services industry, meeting the needs of customers, communities and employees is crucial to the financial success and long-term health of an organization. During the last year, FleetBoston has experienced periods of significant controversy about poor customer service. Shareholders who attended last year’s annual meeting were faced with protesting members of the Boston community, angry that FleetBoston was failing to meet the community’s needs for affordable banking services. This resolution will create positive incentives for executives to create a culture that supports excellent employee relations and to seek excellence in customer service and community relations.

PLEASE VOTE YES!

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