Bank Of America chief, Brian Moynihan
Moynihan‘s compensation did not include a cash bonus as is typical for many financial firms when compensating their CEOs.
The missing cash bonus is not so surprising for Moynihan though. The head of the bank has been under pressure to revive the struggling bank and increase capital by increasing earnings, selling off non-core business units and cutting costs. BofA hit major trouble back in 2011 when its shares were trading for around $5 and investors questioned Moynihan’s ability to save the bank.
But the stock has recovered majorly, rallying over 60% in 2012 as Moynihan executed on his plan to cut costs and raise capital without issuing new shares.
Still, the bank isn’t taking any chances by awarding Moynihan big bucks. Though his compensation is up from 2011 when he took a $8.1 million pay package his salary this year remains locked at $950,000.
BofA knows it still has a lot to prove to investors and regulators as it climbs out of the ugly mess created by its merger with Countrywide which has resulted in billions in losses, fines and settlements for the bank. Next month, results from the Fed’s stress test will show just how far along BofA has come and whether or not it will be able to give investors bigger dividends.
Moynihan‘s 2012 compensation is up there, actually about a million more than JPM’s Jamie Dimon, whose pay package was $11.5 million for last year including a $1.5 million salary and $10 million in restricted stock. That’s a big cut for Dimon who in the previous year saw a pay package of $23 million. Dimon‘s big pay cut was the result of his bank’s massive London whale trading loss in May which cost it $6 billion.
Last month Jefferies Group said it was paying its CEO $19 million including a $1 million salary, a $5 million cash bonus (which he apparently voluntarily reduced from $8 million) and $13 million in stock.
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