It looks like Bank of America Corp. (NYSE:BAC) Chief Executive Brian Moynihan is going to have to start delivering the goods if he wants to catch up with the likes of JP Morgan Chase’s (NYSE:JPM) Jamie Dimon and Goldman Sachs’ (NYSE:GS) Lloyd Blankfein when it comes to compensation. Bank of America cut Moynihan’s 2011 pay, freezing his salary and withholding cash bonuses, Bloomberg reported, citing a person briefed on the situation.
The Charlotte, North Carolina-based bank will keep Moynihan’s salary at $950,000, said the source, who asked to remain anonymous because the pay package has not yet been made public. In a filing yesterday, the bank said it gave him $5.9 million in restricted stock units, which were mostly associated with his future performance, Bloomberg said. He got more than $9 million in 2010.
Last year, Moynihan sold $33 billion in assets and slashed 30,000 jobs as Bank of America sank 58 percent in New York trading in the midst of sluggish revenue and soaring costs from deficient mortgages. So far this year, the stock has topped the 30-company Dow Jones Industrial Average, with a gain of 44 percent, buyoed by hopes that an improving U.S. economy will bode well for the firm, said the report.
According to Jeanne Branthover, a managing director at New York’s Boyden Global Executive Search Ltd., companies are deciding to set examples starting at the very top, by saying, “‘You know what? If the company doesn’t do well, our CEO isn’t going to do as well.'” “Yes, these guys make a lot of money,” said Branthover, “But they have to wait it out with their deferred equity, like everyone else.”
Bank of America isn’t the only company putting the financial screws to its executives. Morgan Stanley (NYSE:MS) CEO James Gorman’s 2011 pay was cut by 25 percent from a year earlier and JP Morgan Chase & Co. is not increasing CEO Jamie Dimon’s already-considerable salary, Bloomberg said, citing people familiar with the plans. Dimon could be making as much as $23 million, and Gorman could be at $10.5 million, said the people, who asked not to be named because the total pay amounts have not been not made public. Goldman Sachs Group Inc. CEO Lloyd Blankfein’s restricted stock bonus tumbled 44 percent to $7 million for a year in which earnings fell by 47 percent on a decrease in fixed-income trading revenue.
To contact the reporter on this story: Gina Smith at firstname.lastname@example.org
To contact the editor responsible for this story: Damien Hoffman at email@example.com