$11 million stock bonus goes to Bank of America CEO Moynihan

The Charlotte ObserverFebruary 20, 2013 

US NEWS ECONOMY-INQUIRY 6 ABA

John J. Mack (left), Chairman of the Board, Morgan Stanley and Brian Moynihan, Chief Executive Officer and President, Bank of America Corporation, testify before the Financial Crisis Inquiry Commission on Jan. 13, 2010 in Washington, DC.

OLIVIER DOULIERY — MCT

Bank of America CEO Brian Moynihan’s stock bonus nearly doubled this year, to $11 million, reflecting a steep share price rise and the board’s apparent confidence in Moynihan’s progress on the bank’s legal issues and capital position.

And going forward, he’s getting a base salary increase as well: to $1.5 million from $950,000, according to a person familiar with the matter.

This year’s stock grant, disclosed in a securities filing Tuesday, is a sharp increase from the $5.9 million in stock awarded in February 2012, back when shares were trading close to $8. Bank of America’s stock was the best performer in the Dow Jones Industrial Average by the end of the year, and shares closed at $12.19 on Tuesday.

Stock grants for Bank of America’s other top executives remained more steady. After two years of being the bank’s top stock award earner, co-chief operating officer Tom Montag received a grant worth about $8.2 million. His counterpart, Charlotte-based David Darnell, received a grant worth $5.2 million.

The stock units will vest over the next several years, so the actual pay will depend on the shares’ performance in the future.

A fuller measure of pay for Bank of America’s top executives will come out in the bank’s annual proxy filing, expected next month.

Counting his base salary, Moynihan’s total pay will likely reach $12 million, up from $7 million last year, according to the source, who wasn’t authorized to speak publicly.

Despite the stock rise, the Charlotte-based bank’s earnings lately haven’t been stellar. In the last two quarters, Bank of America largely broke even as legal settlements all but wiped out its profits.

But those settlements also put large chunks of legal liability behind the bank:

• In January, Bank of America announced a $10 billion deal with Fannie Mae to settle a long-running dispute with the mortgage giant over loans made primarily by Countrywide Financial Corp. that originally were worth about $1.4 trillion.

• The same day, the bank committed another $2.9 billion in cash payments and mortgage relief as part of a settlement with the Office of the Comptroller of the Currency and the Federal Reserve that ended an independent foreclosure review mandated by an earlier settlement with the regulators.

• In the third quarter, Bank of America spent $2.4 billion to put to rest a shareholder suit connected with the acquisition of Merrill Lynch, which was announced in 2008.

Bank of America has also built up capital by selling off noncore assets and business lines.

For all of 2012, Bank of America earned $2.8 billion for shareholders, up from $85 million in 2011.

Bank of America’s stock rose 109 percent over 2012. The year before, shares had fallen 58 percent, the worst in the Dow.

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