By Hugh Son
Monday, January 31, 2011; 7:36 PM
Bank of America Corp. gave Chief Executive Officer Brian T. Moynihan a $9.05 million bonus for his first year as leader of the largest U.S. lender by assets, less than the company awarded to its investment banking head.
Moynihan, 51, received the bonus in restricted stock, the Charlotte, N.C.-based bank said Monday in a regulatory filing. Thomas K. Montag, who leads global banking and markets, got $14.3 million in restricted stock and $900,000 in cash awards.
Bank of America earned $6.3 billion from Montag's division last year while the parent company was unprofitable as Moynihan took $12.4 billion in impairments at operations purchased by his predecessor, Kenneth D. Lewis. The bank's shares "did underperform" in 2010, when they dropped 11 percent amid losses tied to repurchasing faulty mortgages from investors including Fannie Mae and Freddie Mac, Moynihan told analysts Jan. 21.
Awards for executives including Moynihan were based upon "recognition of 2010 as a unique and critical transition year," the company said in the filing.
Moynihan's salary was unchanged from a year earlier, when it was listed at $950,000. Montag's 2011 salary was raised to $850,000 from $800,000.
Some rivals have been raising base salaries in response to increased pressure from regulators on bonuses. Goldman Sachs Group Inc. gave Chairman and Chief Executive Officer Lloyd Blankfein a $12.6 million stock bonus for 2010 and raised his base salary to $2 million this year from $600,000, the New York-based bank said last week in filings.
Citigroup Inc. boosted CEO Vikram Pandit's base salary to $1.75 million from $1 after the bank's first profit for a year under his watch. Pandit declined a bonus for the year.
Bank of America set aside about 10 percent less for year-end compensation in its investment banking division as revenue slipped, two people with direct knowledge of the decision said last week. Employees in Montag's unit were told their year-end payouts on Jan. 27, the people said.
Regulators including the Federal Deposit Insurance Corp., the Federal Reserve and the Securities and Exchange Commission are drafting rules on pay meant to limit practices considered risky. Soaring pay at Wall Street firms over the past three decades gave traders and managers an incentive to disregard risk, the Financial Crisis Inquiry Commission wrote in a book published last week.
- Bloomberg News