Bank of America Corp. cut Chief Executive Officer Brian T. Moynihan’s compensation for 2011, granting him no cash bonus and freezing his salary, said a person briefed on the executive’s awards.
The bank is holding Moynihan’s salary at $950,000, said the person, who spoke on condition of anonymity because the Charlotte, North Carolina-based bank hasn’t yet announced his pay package. It gave him $5.9 million in restricted stock units, mostly linked to future performance, the firm said yesterday in a filing. For 2010, the grant had surpassed $9 million.
Bank of America, the second-biggest U.S. lender, plunged 58 percent in New York trading last year as Moynihan sold $33 billion in assets and announced 30,000 job cuts amid stagnant revenue and rising costs from defective mortgages. The stock has climbed 44 percent this year, the best performance in the 30- company Dow Jones Industrial Average, on optimism that the firm will benefit as the U.S. economy improves.
“They’re setting an example from the top, saying, ‘You know what? If the company doesn’t do well, our CEO isn’t going to do as well,’” said Jeanne Branthover, a managing director at Boyden Global Executive Search Ltd. in New York. “Yes, these guys make a lot of money, but they have to wait it out with their deferred equity, like everyone else.”
The bank had agreed to award Moynihan, 52, a $9.05 million restricted-stock bonus last February, according to a regulatory filing the previous month. This year, it gave him 228,302 in stock units that pay out in 12 monthly installments and 532,705 in performance-contingent units that he may receive as early as March 2015 if performance hurdles are met, according to yesterday’s filing. The value is based on the stock’s closing price on the award date, Feb. 15
Source: Bloomberg Businessweek