Bank of America Said to Pay Average Bonus of $400,000

Feb. 3 (Bloomberg) -- Bank of America Corp., the nation’s largest lender, will pay investment-banking employees bonuses of about $4.4 billion for last year, or an average of $400,000 each, a person close to the bank said.
As much as 95 percent will be paid in stock vesting over about three years, the person said. Those receiving the smallest bonuses will get about half their compensation in cash, paid later this month, the person said. The unit accounts for 10,000 people, or 4 percent of the bank’s 283,000 workers.
Bank of America, the target of political wrath for its acquisition of Merrill Lynch & Co. even as the faltering Wall Street firm handed out $3.6 billion of employee bonuses, reaped a $6.3 billion profit in 2009. This year’s investment bank bonuses are a third less than $6.5 billion that the combined units would have paid in the peak year of 2006, the person said, citing internal Bank of America calculations.
“Those numbers sound like the kind of numbers we’d expect to be hearing from Wall Street firms,” said Steven Hall, managing director of New York-based Steven Hall & Partners, an executive compensation consulting firm.
The Financial Times cited unidentified people as saying that top Bank of America performers in global banking and markets will receive bonuses of about $5 million, while managing directors will get $2.5 million to $3 million.
Goldman Sachs, JPMorgan
“We attempted to balance the need to pay competitively with our understanding of the general concern over the level of compensation on Wall Street,” spokesman Robert Stickler said. “The most important thing is that much more of year-end compensation is now deferred and tied to long-term stock performance and there are clawbacks.”
Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co.’s investment bank slashed their compensation in the fourth quarter. The three firms set aside $39.9 billion for pay in 2009, below the 2007 record of $44.7 billion. The total fell short of the $46.1 billion five analysts expected this year and is almost $10 billion less than what some analysts estimated in October.
JPMorgan’s investment bank had the lowest ratio of the three of total pay to revenue, at 33 percent. Goldman Sachs’s rate was 36 percent and it was 62 percent at Morgan Stanley.
Moynihan’s Salary Bumped
At Bank of America, based in Charlotte, North Carolina, the bonuses equate to 19 percent of the $23 billion in revenue at the investment bank. That ratio would have been 26 percent in 2006, the person briefed on the matter said.
Separately, Bank of America said in a regulatory filing that it raised the base salary of new Chief Executive Officer Brian Moynihan to $950,000 this year from $800,000 in 2009. The bank also boosted the salaries of Joe Price, head of consumer, small business and card banking, and Barbara Desoer, head of home loans and insurance, to $800,000 from $500,000.
Details on the executives’ 2009 compensation will be reported in the bank’s annual proxy statements.
Twenty-eight Bank of America employees and 149 Merrill employees received bonuses of at least $3 million for 2008, according to a report last year by New York Attorney General Andrew Cuomo. Those 149 Merrill employees received a combined $858 million, an average of $5.8 million, the report said.
Bank of America in December repaid $45 billion in federal bank-rescue aid, freeing the company from restrictions on compensation.
The bank’s shares gained 14 cents to $15.74 at 9:40 a.m. in New York Stock Exchange composite trading. The shares have gained 4.7 percent this year, compared with a 10 percent increase in the 24-member KBW Bank Index.