Montag Remains BofA’s Top-Paid Banker at $15.5 MillionHugh Son
Bank of America Corp.’s highest-paid senior manager remains co-Chief Operating Officer Thomas K. Montag, who earned more than his boss Brian T. Moynihan for the fourth straight year.
Montag got a 6.9 percent raise to $15.5 million for 2013, according to a regulatory filing yesterday. That compares with $14 million awarded to Moynihan, 54, representing a 17 percent increase from 2012 for the chief executive officer.
“I suspect Montag continues to make more than the CEO because of his responsibility bringing in the money,” said David Schmidt, a consultant at executive pay firm James F. Reda & Associates. “They’re depending on him to build revenue.”
Bank of America, the second-largest U.S. lender, has leaned on Montag’s operations to support earnings as it spent more than $50 billion to settle mortgage disputes. Montag, 57, is the former Goldman Sachs Group Inc. trading head who runs Bank of America’s investment banking and markets divisions. He joined the Charlotte, North Carolina-based firm with the 2009 takeover of Merrill Lynch & Co.
Montag’s pay included a $5.8 million cash bonus, $8.7 million in restricted stock and a $1 million salary, according to the filing with the U.S. Securities and Exchange Commission. The filing covers the bank’s top executives, and doesn’t include the pay of traders or investment-banking managers whose compensation could be higher.
Profit from global banking and markets slipped 10 percent to $7.9 billion in 2013 excluding accounting charges. Revenue rose at the divisions while Montag kept risk within company limits, the firm said in the filing. Companywide earnings more than doubled to $11.4 billion as costs from legal settlements subsided.
David Darnell, the 61-year-old Bank of America co-COO who runs retail banking and wealth management, got a 5.3 percent raise to $10 million. Chief Financial Officer Bruce Thompson, 49, got a 9.1 percent raise to $12 million. While the lender disclosed restricted-stock grants last month, the new filing included all parts of the pay packages.
The board’s compensation committee is led by Monica C. Lozano, the CEO of Impremedia LLC, the Spanish-language news and information firm based in Brooklyn, New York.
The figures represent what the bank’s board decided top executives deserved for their performance. Bank of America also released calculations conforming to SEC standards that reflect the awards that vested during the year, as well as changes in pension plans and perks such as the use of corporate aircraft.
Under that method, Moynihan’s 2013 compensation was $13.1 million, compared with $8.3 million the previous year. Montag received $15.1 million, compared with $14.4 million in 2012. Bank of America stock advanced 34 percent in 2013.
Also in the filing, the bank urged investors to approve new terms on Berkshire Hathaway Inc.’s preferred stock stake, saying a rejection could push the lender to issue new securities that would dilute profits.
The deal with Warren Buffett’s Berkshire would increase Tier 1 capital by $2.9 billion, the Charlotte, North Carolina-based bank said in its regulatory filing. Regulators use the metric to assess a lender’s ability to absorb losses.
A rejection is “one factor we would consider in evaluating whether to issue additional series of preferred stock, which may be dilutive to earnings per share of our common stock,” Bank of America said.
Buffett injected $5 billion in 2011 to shore up investor confidence and capital at the bank amid losses tied to home loans. In return, Omaha, Nebraska-based Berkshire got warrants along with the preferred shares paying 6 percent interest.
The amendment, announced last month, would make Bank of America wait at least five years to redeem the preferred stock. Under the 2011 deal, the bank was able to redeem the stake at any time if it paid a 5 percent premium.
Under the new terms, Buffett gives up the right to recover missed dividend payments, and the lender gets to count the securities as Tier 1 capital. The Bank of America shareholders meeting is scheduled for May 7 in Charlotte.