Bank of America CEO Brian Moynihan has joined the $30 million club, according to paperwork the bank filed Friday.
The bank gave Moynihan’s compensation a 30.6% hike in 2021 — pushing his salary past a threshold thus far reserved for chief executives of institutions with considerably more of an investment-banking bent than BofA.
Moynihan’s $32 million package still leaves him behind James Gorman, David Solomon and Jamie Dimon among best-paid U.S. bank CEOs, but he’s gaining ground.
Morgan Stanley and Goldman Sachs paid their figureheads $35 million in 2021, while JPMorgan Chase gave Dimon $34.5 million. However, Moynihan’s 30.6% raise outpaces all of them. Gorman’s pay notched up 6% last year, compared with Dimon’s 9.5%. Solomon saw a 27.5% jump in compensation from the $27.5 million he would have received in 2020 had Goldman not clawed back $10 million over its involvement with the 1MDB scandal.
The raise also stands in contrast to 2020, when pay trended downward slightly as banks grappled with the impact of the COVID-19 pandemic’s first year. Bank of America, for example, shaved 7.5%, or $2 million, off Moynihan’s compensation to give him $24.5 million in 2020. That came in a year when Bank of America’s net income dropped 35%.
Last year, however, saw profit at the Charlotte, North Carolina-based lender jump 78.8% — to $32 billion from $17.9 billion. The bank noted that as a major factor in Moynihan’s pay bump.
Moynihan’s pay breaks down to a $1.5 million base salary (identical to Gorman and Dimon) and $30.5 million in restricted stock units (RSUs). Unlike several other banks, Bank of America does not give its CEO a cash bonus, but 30% of Moynihan’s RSUs vest over the next year and settle in cash. Another 20% vest annually over the next four years.
The remaining half vary by the bank’s performance — and in that regard, Bank of America touted its progress on a number of fronts. Shareholders saw a 47% jump in the bank’s stock price in 2021. The bank grew its deposit balances by 15.5% in 2021 to surpass the $2 trillion threshold. Bank of America’s wealth management and investment-banking segments saw record totals, and its global-markets business reached decade-high sales and trading revenues, the bank said in its Friday filing. And Moynihan shepherded the bank through a leadership shift that saw more than a dozen executives take on new roles.
Moynihan’s pay bump shows Bank of America is serious about retaining talent from bottom to top. The bank’s compensation expenses jumped 10% in 2021 from the previous year, according to The Wall Street Journal. The bank raised its minimum wage to $21 per hour and committed to boosting that to $25 by 2025. It also pledged to give 97% of its workforce a bonus of restricted stock. Meanwhile, the bank’s bonus pool for investment bankers could jump by more than 40%, Bloomberg reported last month.
Two of the U.S.’s six largest banks have yet to detail CEO compensation levels for 2021. It remains to be seen whether Citi CEO Jane Fraser or Wells Fargo chief Charlie Scharf also broach the $30 million club — although each of those banks could face pushback either way.
If Citi does not pony up for Fraser — the first woman CEO of a U.S.-based Wall Street bank — the optics may be poor in the short term from a gender pay-disparity standpoint. However, the bank could make two counter-arguments: First, Citi is engrossed in a strategic shift that has it pivoting away from its international footprint and investing in tech upgrades to overcome deficiencies in risk management and control. Second, 2021 marked Fraser’s first year as CEO and, because she ascended to the role in March, only served 10 months in the bank’s top spot rather than 12. The smart money may be on Fraser seeing her big payday in 2022, depending on the success of Citi’s move away from global retail banking.
Wells Fargo's detractors may bemoan a big windfall for Scharf because the bank, at last count, is operating under nine enforcement actions. The bank, however, ended 2021 on a high note, with profits up 86% over the previous year’s final three months.