Bank of America CEO Brian Moynihan was once again out-earned by one of his top lieutenants, the Charlotte bank disclosed Friday.
Co-chief operating officer Thomas Montag, who is based in New York, was awarded $15.5 million in total compensation for his performance in 2013, a securities filing shows. That’s up nearly 7 percent from $14.5 million the year before. Moynihan’s overall compensation reached $14 million, about 17 percent higher than the previous year.
It’s the fourth year in a row that Montag has out-earned Moynihan, an unusual scenario in corporate America, analysts and compensation experts say.
Montag joined Bank of America when it acquired Merrill Lynch & Co. in 2009. He is in charge of the investment banking and markets divisions. The bank has relied heavily on those areas for revenue, particularly as Bank of America has waded through the aftermath of the mortgage crisis and low interest rates have made retail banking less profitable.
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“If you look at the earnings driver of Bank of America, it continues to be Montag’s world, not the consumer world,” independent bank analyst Nancy Bush said. His global banking division posted record revenue of $16.5 billion last year, the bank said in January.
Bush said the bank’s board also likely feels pressure from investors to keep Moynihan’s compensation out of the ranks of top-paid bankers as he enters his fifth year on the job. Bank of America’s earnings still lag behind rivals such as Wells Fargo, and the bank’s quarterly dividend remains at a penny per share, where it’s been since the financial crisis.
Moynihan, 54, makes significantly less than CEO Jamie Dimon at JPMorgan Chase, who was awarded $20 million for 2013, and Goldman Sachs CEO Lloyd Blankfein, who was paid $21 million for the year before.
Moynihan’s pay is similar to that of Citigroup CEO Michael Corbat, who was awarded $14.4 million for 2013, his first year as chief executive.
Compensation for Wells Fargo CEO John Stumpf, who was awarded $19.3 million for his work in 2012, has not yet been fully disclosed this year.
At Bank of America, “there is still a certain amount of pressure on that board to keep (Moynihan’s) pay relatively constrained, relative to the rest of the banking world,” Bush said. “Even though I think it’s increasingly clear the Street has a favorable view of him and is marking him up as someone who has made a big difference there.”
In the securities filing, Bank of America’s board cited Moynihan’s work to build capital, curb expenses and deepen relationships with customers. The bank says it’s on pace to cut its expenses by $2 billion per quarter by the middle of 2015, a program known as Project New BAC after the bank’s ticker symbol. Bank of America has shed more than 40,000 jobs since the initiative began in 2011.
Board members also praised the bank’s 34 percent stock price appreciation last year. Bank of America shares closed Friday at $17.33.
Friday’s securities filing measures executive compensation in two ways. The first measure takes into account what an executive was awarded for his or her performance the year before. By that standard, Moynihan made $14 million.
The second method measures how much the bankers actually brought home in 2013. Most senior executives are paid in stock awards that vest over a period of years.
By that measure, Moynihan was paid $13.1 million in 2013, up nearly 60 percent from $8.3 million the year before.
Montag’s pay increased to $15 million from $14.4 million.