BofA's Montag Beats CEOs Moynihan, Blankfein With Bonus of $15.2 Million
Brian T. Moynihan, CEO of Bank of America Corp.
Brendan Hoffman/Bloomberg
Brian T. Moynihan, chief executive officer of Bank of America Corp.
Brian T. Moynihan, chief executive officer of Bank of America Corp. Photographer: Brendan Hoffman/Bloomberg
Feb. 1 (Bloomberg) -- Bank of America Corp. gave $15.2 million in bonuses to its investment banking chief Thomas K. Montag, a reward 68 percent bigger than that of his boss, Chief Executive Officer Brian T. Moynihan. Bloomberg's Erik Schatzker reports. (Source: Bloomberg)
Jan. 27 (Bloomberg) -- Brian Moynihan, chief executive officer of Bank of America Corp., discusses financial regulation and the bank's business model. Moynihan, speaking with Erik Schatzker at the World Economic Forum in Davos, Switzerland, on Bloomberg Television's "Inside Track," also talks about the role of banks in the economy and U.S. government debt. (Source: Bloomberg)
Jan. 21 (Bloomberg) -- Brian Moynihan, chief executive officer of Bank of America Corp., talks about the company's fourth-quarter loss reported today and outlook. The largest U.S. bank by assets reported a loss of $1.24 billion, or 16 cents a share, as it boosted provisions tied to faulty loans and litigation and wrote down the value of its mortgage unit. Excluding a goodwill charge, adjusted net income was 4 cents a share, less than the average estimate of 21 cents by 24 analysts surveyed by Bloomberg. Moynihan speaks with Erik Schatzker on Bloomberg Television's "InsideTrack." (Source: Bloomberg)
Bank of America Corp. gave $15.2 million in bonuses to its investment banking chief Thomas K. Montag, a reward 68 percent bigger than that of his boss, Chief Executive Officer Brian T. Moynihan.
Montag, 54, won $14.3 million in restricted stock and $900,000 in performance-linked cash for 2010, the Charlotte, North Carolina-based bank said yesterday in a regulatory filing. That compares with Moynihan’s $9.05 million stock bonus and the $12.6 million in shares awarded to Goldman Sachs Group Inc. CEO and Chairman Lloyd Blankfein.
“He’s being paid as if he should be looked at as equivalent to someone who leads companies,” said Jeanne Branthover, a managing director at Boyden Global Executive Search Ltd. in New York. “They are saying that investment banking was responsible for most of the company’s profit, and therefore this person deserves more money than anyone else.”
Montag’s global banking and markets division was the company’s most profitable unit last year with $6.3 billion in earnings. Moynihan oversaw a $2.2 billion net loss in 2010 as he booked impairments to credit-card and mortgage divisions. Bank of America’s shares dropped 11 percent last year, the worst performance among the 10 biggest U.S. banks, and Moynihan called it a “repair and rebuilding year.”
Bank of America, the largest U.S. bank by assets, also raised Montag’s 2011 annual base salary to $850,000 from 800,000, while leaving Moynihan’s unchanged at $950,000.
Profit Targets
This was the second straight year that Montag, a former Goldman Sachs trading head, was the highest-paid of Bank of America leaders whose compensation must be disclosed by the firm. Montag got $29.3 million in stock awards in 2009, a package that included a $20 million stock award set in May 2008 when then-Merrill Lynch CEO John Thain hired Montag. Bank of America acquired Merrill Lynch in 2009.
The bonuses are deferred and executives must reach profit targets before getting stock in 2014 at the earliest, said Robert Stickler, a company spokesman. Montag’s business accounted for about 70 percent of the firm’s pre-impairment profit last year, he said.
“The bonus is being localized to where profits are coming from,” said James Reda, managing director at New York-based compensation consultant James F. Reda & Associates. “Moynihan didn’t have the same performance as Montag in 2010.”
The bonuses were based upon “recognition of 2010 as a unique and critical transition year,” Bank of America said yesterday in the filing.
Blankfein, 56, has led Goldman Sachs, Wall Street’s most profitable firm, since 2006. He received 78,111 shares on Jan. 26, according to a filing last week. At the closing price of $161.31 that day, the shares would be valued at $12.6 million.
Boosting Salaries
Some rivals have been raising base salaries in response to increased pressure from regulators on bonuses. Goldman Sachs raised Blankfein’s base salary to $2 million this year from $600,000, the New York-based bank said last week in filings. Goldman Sachs had net income of $8.35 billion last year, down from about $13.4 billion in 2009.
Citigroup Inc. boosted CEO Vikram Pandit’s base salary to $1.75 million from $1 after the bank’s first profit for a year on his watch. Pandit declined a bonus for the year. The firm is using stock for a bigger portion of employee bonuses, as much as 50 percent for 2010, compared with about 40 percent a year earlier, said people with knowledge of the shift.
Employees of Montag’s unit were told their year-end payouts on Jan. 27, two people with knowledge of the decision said last week. Bank of America set aside about 10 percent less for year- end compensation in the division as revenue slipped.
Pay Limits
The firm boosted the cash component of those awards to as much as 30 percent, from as little as 5 percent cash for 2009, when the company was under the jurisdiction of Kenneth Feinberg, then the Obama administration’s special master on banker pay. The bank repaid $45 billion in U.S. assistance in 2009.
JPMorgan Chase & Co., the second-largest U.S. bank by assets, hasn’t disclosed 2010 stock awards for CEO Jamie Dimon.
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 last three decades gave traders and managers an incentive to disregard risk, the Financial Crisis Inquiry Commission wrote in a book published last week.
To contact the reporter on this story: Hugh Son in New York at hson1@bloomberg.net
To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net.
Rate These Stories
Rate this Page