Business

Following tax cuts, Bank of America is paying bonuses to more than half its employees

Bank of America CEO Brian Moynihan, right, speaking with Michael Marsicano, president and CEO of Foundation for the Carolinas.
Bank of America CEO Brian Moynihan, right, speaking with Michael Marsicano, president and CEO of Foundation for the Carolinas. dlaird@charlotteobserver.com

Bank of America CEO Brian Moynihan said this week that the company will pay $1,000 bonuses to more than half its workforce, the latest company to announce payments after the passage of the federal tax overhaul.

The bonuses at the Charlotte-based bank will go to roughly 145,000 U.S.-based employees “in the spirit of shared success,” Moynihan said in an internal memo obtained by the Observer. Workers with total compensation up to $150,000 are eligible.

The bank employs more than 15,000 in Charlotte, though a spokesman couldn’t provide a breakdown of how many of those will receive the one-time payment. Bank of America joins AT&T, Comcast and Fifth Third Bancorp in announcing $1,000 bonuses for employees this week. Wells Fargo, another major Charlotte employer, said this week that it is raising its minimum wage 11 percent, to $15 an hour. PNC, which has a Charlotte office, also said Friday that it is giving $1,000 bonuses to 90 percent of its employees and raising minimum pay to $15 an hour, while Cornelius-based Aquesta Financial Holdings announced the same for all employees.

The tax overhaul, signed into law by President Donald Trump on Friday, reduces the corporate rate from 35 to 21 percent. The legislation is expected to boost corporate profits, though it’s been criticized by Democrats and many economists for giving greater benefits to corporations and the wealthy than the middle class.

In his memo, Moynihan said the corporate tax cut will benefit Bank of America in 2018, but he also made clear that other business fundamentals are helping the bank. Through the third quarter this year, Bank of America’s profits are up almost 20 percent, totaling $15.7 billion.

The company will pay the $1,000 bonuses by year end, Moynihan said. Bank of America employs about 210,000, meaning the one-time payments will go to almost 70 percent of its workers.

Moynihan said at the Charlotte Chamber’s annual economic outlook luncheon. “We have a duty here to make sure that we sort of take care of these things and do it the right way.”

Ely Portillo: 704-358-5041, @ESPortillo

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