Bank of America Corp., the lender seeking to trim expenses by eliminating at least 30,000 jobs, will pay former wealth-management division head Sallie L. Krawcheck $6 million after her dismissal last month.
That sum includes one year of her former salary, or $850,000, and a one-time payment of $5.15 million to be awarded in 2012, the Charlotte, North Carolina-based bank said yesterday in a filing. Joseph Price, whose position was also eliminated, gets a $5 million package, the bank said.
Chief Executive Officer Brian T. Moynihan ousted Krawcheck and Price in September as part of his effort to streamline the biggest U.S. bank amid mortgage-related losses and a 56 percent share decline this year. His target is to reduce annual costs at consumer banking units by $5 billion, mostly through job cuts.
“This is yet another story about a corporate executive getting significant amounts of money after they’ve left their employer,” said Richard Lipstein, a managing director for headhunter Boyden Global Executive Search. “She was part of a restructuring that eliminated a layer of management; at her level, there are certain obligations that have to be fulfilled if you leave for non-cause.”
Price, 50, ran consumer banking and credit cards. Just like Krawcheck, 46, he will get $850,000 in installment payments, and his one-time award of $4.15 million is contingent upon not breaching a contract with the lender.
The executives agreed to release Bank of America from claims, and to refrain from competing with the firm, soliciting employees or luring away customers for one year. They will receive health care benefits until the agreement expires in 2012, the bank said.
Krawcheck also stepped down from the Financial Industry Regulatory Authority’s board of governors, said Nancy Condon, a spokeswoman for the brokerage-industry watchdog, declining to elaborate.