UPDATE: Jan. 27, 2022: Bank of America bumped up its base salaries for managing directors in investment banking and markets to $500,000 from $400,000 last year, Bloomberg and Business Insider reported Wednesday, citing anonymous sources.
The bank would follow that up Thursday by promoting 314 employees to that rank. More than 55% of the promoted employees are women or people of color, a source told Bloomberg.
And managing directors aren’t the only ones getting $100,000 boosts. Directors will earn as much as $350,000 this year — up from $250,000, according to Bloomberg. Business Insider, however, reported directors' pay would jump half that much — to $300,000.
Pay for vice presidents at the bank is rising to $225,000, and associates will earn about $160,000 in base salary — up from $140,000, the outlets’ sources said.
Dive Brief:
- Bank of America will give most of its employees restricted stock bonuses worth a collective $1 billion, according to a memo seen by CNN.
- The shares, scheduled to vest over four years beginning in 2023, may stand as an effort by the Charlotte, North Carolina-based bank to retain employees amid an industrywide war for talent. Employees will receive the full value in March.
- About 97% of the firm’s workforce is eligible to receive bonuses ranging from 65 to 600 restricted stock units per employee, based on compensation, CNN and Bloomberg reported Tuesday. Bank of America employees earning more than $500,000 are not eligible to receive the shares.
Dive Insight:
With Tuesday's move, Bank of America shows restricted-stock awards are not just for top executives.
The nation's second-largest bank, however, is not the first to give stock bonuses to its rank and file. TD, in October, said it would give a bonus of five shares to all non-executive employees based in the U.S., U.K. or Canada.
While a number of Wall Street juggernauts are focusing their talent-retention efforts on executives and investment bankers, Bank of America may be hoping the awards' four-year vesting period dissuades employees further down the corporate hierarchy will jump ship.
Nearly 4.5 million Americans quit their jobs in November, the Bureau of Labor Statistics found this month.
"A lot of people left the labor market and they’re not going to come back, even with a strong bid for their services," Bank of America CEO Brian Moynihan said last week at a virtual event hosted by Fortune and the World Economic Forum. "And that’s just the reality we’re going to be facing. We’re going to be chasing that dynamic of not enough people working."
Based on current share prices, the stock bonuses would be worth about $2,900 on the low end, to $27,000 for higher-salary employees, according to CNN.
Part-time employees and those based internationally will receive a cash award of $750 this year in lieu of restricted stock units.
This will mark the first year that employees making less than $100,000 per year will receive awards in stock rather than cash. Bank of America gave those employees cash bonuses worth $1,000 each year from 2017 to 2019, and $750 in 2020, after the bank’s annual net income tumbled 35%.
By contrast, the bank reported a 78.8% increase in annual profit in 2021. At the same time, compensation expenses swelled 10% year over year.
Bank of America last April gave $10,000 raises to investment-banking analysts and an extra $20,000 to associates and vice presidents. It followed that up in August with a second raise that brought first-year pay from $95,000 to $100,000.
It lifted its companywide minimum wage from $20 per hour to $21 in October, and the bank plans to boost that figure to $25 by 2025.
Additionally, senior executives are planning to increase this year's bonus pool for investment bankers by more than 40%, Bloomberg reported. Bonuses could jump more than 30%, on average, for bankers in sales and trading, one source said.
