Bank of America shareholders face a referendum on oversight in the banking industry when they vote on a crucial leadership decision later this month, CLSA analyst Mike Mayo said Tuesday.
The shareholders will meet on Sept. 22 to vote on a proposal to make official the combination of the CEO and chair roles. The board named CEO Brian Moynihan chairman in October after Charles Holliday stepped down.
Mayo has long advocated against the move, saying it rewards the bank's leadership following a bad year.
"It's not only important for Bank of America shareholders. It's important for the banking industry," he told CNBC's "Squawk Box." "We believe that the actions taken by the board of Bank of America make a mockery of the industry's efforts to improve oversight of the banks since the financial crisis."
In a note, Mayo called on shareholders to reject the vote, saying Bank of America must first put in place better board oversight and produce a "full clean year" with improved financials and better Federal Reserve stress test result.
His note said keeping the positions in one hand could make the bank a bigger target for regulators.
The Federal Reserve approved Bank of America's stock buyback plan in March, but said the company needed to address perceived weaknesses in its capital strategy plan.
Bank of America did not immediately respond to a CNBC email seeking comment.
In 2009, shareholders passed a rule that said the roles of CEO and chair should be split between two individuals.