Shareholders should throw out Bank of America's corporate governance board following its decision to promote CEO Brian Moynihan to chairman of the board in October, CLSA bank analyst Mike Mayo said Friday.
"Bank of America said they missed their targets last year, and what happens to the CEO? He gets promoted to also have the chairman position," Mayo told CNBC's "Squawk Box." "Is that the way things work for the over 200,000 employees at Bank of America? Miss your targets, get promoted?"
Mayo also criticized Bank of America for its problems in past Federal Reserve stress tests, a $4 billion regulatory capital misstatement and for falling short in return on equity. He continued to say the bank does not have a time frame for any public financial target.
Bank of America declined to comment. It holds its annual shareholder meeting on May 6.
About 57 percent of analysts have a buy or overweight rating on the bank's shares, and 34 percent rate the stock hold, according to FactSet data. The average price target is $18.14, above its last closing price of $15.69.
Mayo made his comments after two proxy advisers—Glass Lewis and Institutional Shareholder Services (ISS)—told shareholders they should vote against members of BofA's corporate governance committee in response to the company's decision to appoint Moynihan chairman without consulting shareholders, The Wall Street Journal reported.
In 2009, shareholders passed a rule that said the roles should be split between two individuals. Bank of America told the Journal the rule was passed in the aftermath of the financial crisis and during the tenure of a different CEO, Kenneth Lewis.
Mayo said Glass Lewis and ISS did not go far enough in their advisory.
"I say, also look at the failed financial performance relative to what I think are their targets, the lack of a public time frame for future financial targets, the poor tone at the top of the company, and lack of accountability," he said.
He said regulators will step in to fill the void if investors do not step up and hold Bank of America accountable.
"If you want more regulation, go ahead. Let the directors stay on Bank of America's board. If you want to show that we collectively are taking ownership of the financial industry and stop being embarrassed by bad practices, then let's do something May 6," he said.