Bank of America Corp., the second-biggest U.S. lender, said Chief Executive Officer Brian T. Moynihan’s 2011 compensation package was $7 million, a 30 percent cut, as the company’s stock slumped.
The CEO’s salary was unchanged at $950,000, with the rest of his package consisting of $1.82 million in “cash-settled restricted stock units” and $4.24 million of restricted stock units tied to performance, according to a regulatory filing yesterday. A separate calculation conforming to U.S. Securities and Exchange Commission standards showed Moynihan’s compensation quadrupled to $8.09 million.
Moynihan, 52, spent his second year as CEO selling more than $33 billion in assets and targeting $8 billion of cost savings as revenue stagnated. Profit rebounded to $1.4 billion in 2011 from a $2.2 billion loss a year earlier, and capital levels rose in the fourth quarter. The stock plunged 58 percent last year, the worst in the Dow Jones Industrial Average. This year, it’s leading the benchmark with a 75 percent gain.
“For 2011, the committee considered Mr. Moynihan’s leadership and execution against our company’s strategic plan, in light of the challenges facing our industry,” the lender said in the filing. “Under Mr. Moynihan’s direction, our company continued to strengthen its balance sheet in key risk areas by improving capital and overall liquidity.”
Bank of America’s board also noted Moynihan’s cost-cutting effort, known as Project New BAC, which seeks to trim as much as $8 billion in expenses and at least 30,000 jobs at the Charlotte, North Carolina-based firm.
Timing of Payments
The bank’s top executives get most of their 2011 compensation in share units to be paid in the future if they meet performance targets. While Moynihan got no cash bonus for a third year, some of his deputies received such awards. Cash-settled restricted stock units vest and pay monthly over 12 months through March 2013, according to the filing.
Moynihan’s pay increased in 2011 under SEC guidelines because of differences from the bank’s method on the timing of compensation tied to equity grants. The agency’s total also included changes in pension plans and perks such as $385,614 for use of corporate aircraft.
Moynihan simplified the firm’s management structure last year by naming Thomas K. Montag and David Darnell co-chief operating officers and ousting division heads Sallie Krawcheck and Joseph Price.
Montag, who oversees global investment and commercial banking and trading divisions, earned $12 million, according to the bank’s table of 2011 compensation decisions. The sum was $14.3 million by the SEC method of accounting, compared with $831,248 the previous year.
Darnell, who oversees retail units including deposits, wealth management, credit cards and home loans, had his compensation listed at $8 million according to the bank’s calculation. Bruce R. Thompson, promoted to chief financial officer from risk chief in the middle of last year, earned $10 million, while Charles H. Noski, who became vice chairman after Thompson replaced him as CFO, was awarded $4.25 million.
The firm’s board will shrink to 12 members after D. Paul Jones doesn’t seek re-election at the company’s annual investor meeting in May. Jones, 69, was among four new directors in June 2009 when Kenneth D. Lewis, CEO at the time, revamped the board amid pressure from regulators.