Bank of America Corp (BofA) is likely to pay its investment bankers bonuses close to 2007 level as the bank tries to retain key employees following its takeover of Merrill Lynch, says a media report.
Attributing to people familiar with the situation, the Wall Street Journal said that BofA bankers are expected to get 2009 bonuses equal to 2007 levels, the overall average is likely to be "somewhat" lower.
Merrill paid out $5.8 billion in year-end bonuses in 2007, the report said adding that the size of Bank of America's bonus pool could not be determined.
As per the basic formula likely to be used by BofA, about 25 per cent of 2009 bonuses would be paid in cash, with the rest as deferred payments of stock or cash that would vary in value with the company's performance.
Quoting company spokesman Robert Stickler, the daily said the figures still could change and must be approved by the bank's board later this month.
Some of the deferred stock would be in the form of "phantom units", subject to fluctuations in the bank's share performance and available in increments of cash over a three-year period, the report noted.
According to the publication, bankers expect to be told about their pay in late January or early February. The amounts would be awarded in mid-February.
Brian Moynihan, who took as BofA's CEO this month, replacing Ken Lewis, is trying to repair the bank's tarnished image and shore up its investment-banking unit after several high-profile departures in early 2009 cast doubt on the viability of the Merrill acquisition.
BofA, was reportedly sued by the US Securities and Exchange Commission (SEC) over accusations that it misguided shareholders over the bonuses paid by Merrill in 2008.
Reportedly, BofA, which bought Merrill in September 2008, said in a regulatory filing to the SEC in November of that year that Merrill agreed not to pay bonuses.
The said announcement came after the bank had already agreed to Merrill paying about $5.8 billion.
