The Bank of America CEO salary, although a bit lesser than those of his contemporaries, is fast rising. The remuneration of Brian Moynihan, who effectively heads one of America’s largest banks, has somewhat been fluctuating in recent years moving upwards and downwards since his assumption of office. But one thing is noteworthy – the willingness of the CEO to make sacrifices for the bank. In appreciation of this, the board of the Bank of America decided in 2021 to review his pay upwards so he can join the “30 million gang”. This is a group of bank CEOs in America who earn $30 million and above in their respective organizations. In a few years to come, the Bank of America CEO salary may surpass those of his other big 4 contemporaries if Brain Moynihan keeps up the drive with which he has stirred the bank these recent years.
In the wake of the coronavirus (COVID-19) pandemic that hit virtually all sectors of the economy in America, Bank of America experienced a massive loss in revenue and profits. This was occasioned by the drop in the prices of the bank’s stocks and shares. The Charlotte, North Carolina-based mega lender further experienced a whopping 35% drop in net income. In light of this, a meeting was convened and the Bank of America CEO salary was slashed by 7.5% meaning a $2 million reduction for the first time in 5 years. Brian Moynihan took the cut in good faith. This brought his total take-home package down to $24.5 million in 2020. Just as he did in 2014 when he also took a pay cut, he stood his ground and strategized with his team on how to improve the fortunes of the bank. He was not the only one in the situation at the time though. The chiefs of two other top-rated banks also received a pay cut.
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Brian Moynihan’s expertise came in handy
Bank of America is a member of the Big Four, a group of the most prominent US banks with the others being Wells Fargo, JP Morgan Chase, and Citibank. Due to its big lender status, the bank rakes in a lot of revenue from interests and charges on loans. However, the US government had to wade and put a benchmark on the percentage to be charged during the pandemic period resulting in losses in profits and income streams. This affected other banks too.
Through determination, strategy, and purposeful leadership, Moynihan was able to effect some positive changes. Bank of America experienced some record-breaking trading activities and financial recovery. The bank’s stock prices rose by 47% in 2021 leading to a tremendous increase in revenues and annual profits. Bank of America’s net revenue for 2021 increased by 10% to $22.1 billion. The bank’s profits for the last quarter of the same year under review stood at $6.77 billion showing a raise of 10%. The deposit balances for the bank also grew by 15.5% to break the $2 trillion mark last year. The total net income for the bank in 2021 was recorded as $32 billion, an 85.5% increase from 2020 and a current all-time high. The bank’s investment banking and wealth management sectors were not left out as they surpassed previous records. Trading volume also reached a record decade high. In summary, the bank had a good outing in 2021 as it was a year of recovery for the big financial lender.
The rise in the financial condition of the institution was instrumental in the determination of the Bank of America CEO salary. According to regulatory securities filings made by the bank on the 4th of February, 2022, the CEO’s pay was increased by 31% to $32 million in total compensation pay for 2021. This represents an increase of $7.5 million from the $24.5 million he was receiving. The board of the bank unanimously approved the improved pay package because 2021 was their most profitable year yet and Moynihan was instrumental in the development.
From the securities filling reports, it was spelled out that Moynihan’s $32 million pay consisted of two components which are $1.5 million in base pay and $30.5 million in stock-based incentives. The latter award vests on different dates. This is the biggest pay Moynihan has ever received in his position as the CEO of Bank of America. This is the first time he is crossing the $30 million mark which had previously been like a glass ceiling for him. Though gaining ground at a commendable pace, he remains behind Jamie Dimon, James Gorman, and David Solomon who are the highest-paid bank executives on American soil.
The Bank of America CEO salary quite differs from others in that there is no cash bonus. Brian Moynihan does not a cash bonus for his work which is somehow rare in the banking industry of America and given his level of commitment to his job. However, his equity-based incentives are there to cover him. 20% of his allotted stocks vests gradually in four years. The remaining 80% vests at a much later date and would be settled in cash.
Apart from significant growth in the bank’s financial fortunes, the board of Bank of America also cited Moynihan’s role in training the new crop of executives who have now taken key positions in the bank. The bank has an employee base of about 200,000 people and about 16,000 people work in its Charlotte headquarters. Many of these five new executives that have taken senior leadership positions rose through the ranks just like Moynihan himself. They replaced the former set of employees, who retired, in September 2021.
Bank of America reviewed staff salaries across board
The Bank of America CEO salary is just one of the thousands of remunerations that improved this season. The bank raised its minimum hourly wage to $22 with a view of making it $25 per hour by 2025. In the last five years, it has increased six times. It was raised to $15 in 2017, $17 in 2019, $20 in 2020, $21 in 2021, and now $22 which came into effect at the end of June this year. The recently improved wage conditions led to a rise in Bank of America’s compensation expenses which now stands at 10% of its profits. This is not all, it doesn’t end there. The bank also plans to give out restricted stocks to 97% of the dedicated workforce. This shows that Bank of America is serious about retaining talents across various strata and positions of the organization. It is also touted that the bank wishes to raise its bonus pool for investment bankers to 40%.
Brian Moynihan rose through the ranks at Bank of America
Brian Moynihan, who is one of the longest-serving CEOs of an American bank, has expressed his desire to stay on for a few more years to come. He took over from Ken Lewis who stepped down in December 2010. Rising through the ranks, he has held several positions in the bank and its subsidiaries. He first joined Fleet Boston Bank in 1993 but became Bank of America when the former merged with Fleet Boston in 2004. Je took up the position of CEO of Merill Lynch after its acquisition by the Bank. His last position before becoming CEO was being the president of the bank’s Consumer and Small Business Banking (SBS).
His time at the helm of affairs has brought the bank tremendous growth on many fronts. When he took over, the bank’s shares were trading at $15.06 for a unit as of December 2009. Its price has tripled during Moynihan’s tenure. As of the 10th of February 2022, a share was traded at $49.68. Though it has dropped a bit to $33.50, it is sure to recover in the coming days. Moynihan is sure to do more in the years to come and in return, would be rewarded with jumbo pay.