Bank of America chief executive Brian Moynihan was awarded $13 million for his performance in 2014, a drop of $1 million from the year before as the bank struggles to boost its profitability.
Moynihan’s stock bonus fell to $11.5 million, down from $12.5 million, the Charlotte bank disclosed in securities filings late Tuesday. His base salary remained unchanged at $1.5 million, according to a source familiar with the matter. Like the year before, he did not receive a cash bonus, the source said.
The decline in compensation comes as the Charlotte bank’s profit for all of 2014 fell by 58 percent as its earnings were weighed down by a nearly $17 billion settlement with the federal government over toxic mortgages. The bank posted $4.8 billion in profit for all of 2014.
For his 2014 performance, Moynihan was awarded 709,878 units of restricted shares, about 41,000 fewer than a year earlier. Six of his top lieutenants also received smaller stock bonuses for their 2014 performance compared with the year before.
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Last year was marked by accomplishments as well as some setbacks for Moynihan, 55, who joined Bank of America in 2004 when the lender acquired FleetBoston Financial. Among the key moments for the bank in 2014:
▪ The bank announced in April it had miscalculated its capital ratios, an embarrassing error that put a planned dividend increase on hold for months. The dividend had been stuck at 1 cent a share since the depths of the financial crisis. The bank finally won approval in August from the Federal Reserve to raise its quarterly stock dividend to 5 cents a share.
▪ In August, the bank reached a $16.65 billion settlement with the federal government to resolve claims over toxic mortgages. The deal resolved the bank’s largest outstanding mortgage matter stemming from the financial crisis, Bank of America has said.
▪ In October the bank announced it had reached the goals of Moynihan’s 2011 cost-cutting program, “Project New BAC,” ahead of schedule. The project, named for the bank’s ticker symbol, was among Moynihan’s first major initiatives after becoming CEO in 2010, when the bank was reeling from fallout from the financial crisis and its purchases of Countrywide Financial and Merrill Lynch.
▪ Bank of America’s stock price climbed 13 percent during 2014, better than the rise in the S&P 500 Index. Its shares closed at $16.63 Tuesday. But that’s far below its peak in 2006, when shares traded for more than $50.
For Moynihan, 2015 will be his sixth year as CEO and his first full year as chairman. The bank’s board named him chairman in October, making the first chief executive to hold the post since Ken Lewis was stripped of the title in 2009.
The bank still faces legal challenges: This month, a federal judge denied Bank of America’s request to overturn a jury’s verdict that found it liable for fraud over mortgages made in a program nicknamed “Hustle.” The program was operated by Countrywide Financial Corp., which the bank bought in 2008.
Moynihan also finds himself under continued pressure from investors to boost profits. To reduce expenses, he has cut jobs in the unit that services troubled mortgages. This month, the bank announced layoffs of 250 mortgage and technology workers in Charlotte as it lowers the number of bad loans handled by the unit.
Moynihan’s 2014 compensation lags that of his peers at other major U.S. banks, although CEO compensation at the nation’s biggest banks is still being disclosed.
JPMorgan Chase & Co. CEO and Chairman Jamie Dimon received $20 million in total pay, unchanged from the year before, Bloomberg reported last month. Dimon received his first cash bonus, of $7.4 million cash, in three years. He received a salary of $1.5 million.
Goldman Sachs Group awarded CEO Lloyd Blankfein $24 million in salary and cash and stock bonuses for 2014, Bloomberg reported last month, citing according a person familiar with the matter.
Wells Fargo has not yet disclosed compensation for CEO John Stumpf.
BofA executives’ bonuses smaller
Bank of America’s top executives received smaller stock awards for their performances last year, according to securities filings Tuesday.
Brian Moynihan, CEO: $11.5 million
Thomas Montag, chief operating officer, $7.8 million
Bruce Thompson, chief financial officer, $5.9 million
David Darnell, vice chair of global wealth and investment management, $4.7 million
Gary Lynch, global general counsel, $4.4 million
Terrence Laughlin, president of strategic initiatives, $4.3 million
Neil Cotty, chief accounting officer, $1.9 million