Around 95 per cent will be paid in stock vesting over three years.
Bank of America Corp, the nation’s largest lender, will pay investment-banking employees bonuses of about $4.4 billion for last year, or an average of $400,000 each, a person close to the bank said.
As much as 95 per cent will be paid in stock vesting over about three years, the person said. Those receiving the smallest bonuses will get about half their compensation in cash, paid later this month, the person said. The unit accounts for 10,000 people, or 4 per cent of the bank’s 283,000 workers.
Bank of America, the target of political wrath for its acquisition of Merrill Lynch & Co even as the faltering Wall Street firm handed out $3.6 billion of employee bonuses, reaped a $6.3 billion profit in 2009. This year’s investment bank bonuses are a third less than $6.5 billion that the combined units would have paid in the peak year of 2006, the person said, citing internal Bank of America calculations.
“Those numbers sound like the kind of numbers we’d expect to be hearing from Wall Street firms,” said Steven Hall, managing director of New York-based Steven Hall & Partners, an executive compensation consulting firm.
The Financial Times cited unidentified people as saying that top Bank of America performers in global banking and markets will receive bonuses of about $5 million, while managing directors will get $2.5 million to $3 million.
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“We attempted to balance the need to pay competitively with our understanding of the general concern over the level of compensation on Wall Street,” spokesman Robert Stickler said. “The most important thing is that much more of year-end compensation is now deferred and tied to long-term stock performance and there are clawbacks.”
Goldman Sachs Group Inc, Morgan Stanley and JPMorgan Chase & Co’s investment bank slashed their compensation in the fourth quarter. The three firms set aside $39.9 billion for pay in 2009, below the 2007 record of $44.7 billion.