Last year at about this time, Bank of America took flak for keeping its bonus pool flat for sales and trading bankers despite a 20% boost in revenue.

This year, it may be trying to set the tone for the industry. Senior executives are planning to increase the bonus pool for investment bankers by more than 40%, Bloomberg reported Friday, citing people briefed on the discussions. Bonuses could jump more than 30%, on average, for bankers in sales and trading, one source said.

It may mark an attempt by the bank to consider performance over the past two years. Nonetheless, the move would represent a course correction from a year ago, when the bank kept a tight grip on its purse strings after tripling its loan-loss provisions in 2020.

"You've got to pay for performance, and the shareholder has to benefit, too," Bank of America CEO Brian Moynihan told Bloomberg in January 2021.

The bank's net income applicable to common shareholders saw a 36.6% decline in 2020, compared to the previous year.

Moynihan also knows his Wall Street rivals are vulnerable to influence on compensation. The industry, as a whole, sweetened the pot for junior investment bankers after 13 Goldman Sachs analysts last March described "inhumane" 100-hour workweeks, deteriorating physical and mental health and a souring outlook for the future.

Goldman bumped its salary for entry-level investment bankers from $85,000 to $110,000 a year — but after a raft of competitors ratcheted up their own starting salaries into six digits. It should be noted Bank of America was first among U.S. banks of its size to push the price point up, when it gave $10,000 raises to analysts and an extra $20,000 to associates and vice presidents.

As proactive as this year’s bonus bump might be for the nation’s second-largest bank, it’s reactive, too. 

Bank of America last year moved to institute "cliff vesting" on company stock it gave as part of its 2020 compensation package. The provision would have forced employees to stay at the bank through 2024 to get their 2020 bonuses.

The bank later walked back those vesting restrictions for high-earning investment bankers and traders, but they remained in effect for corporate and commercial banking employees, Bloomberg reported.

The policy change "didn't work the way some people wanted it to, so we fixed it,” Moynihan told Bloomberg at the time.

Bank of America isn’t the first bank to be rumored as paying out hefty bonuses this year. Goldman Sachs is reportedly considering increasing its bonus pool by 50% over last year for investment bankers. JPMorgan Chase, meanwhile, is considering a 40% bump in its bonus pool for investment bankers in underwriting and mergers-and-acquisition advisory roles, Bloomberg and the Financial Times reported last month.

Bank of America’s own pledge may hold its rivals’ feet to the fire.

Increased bonus bumps wouldn’t be limited to investment bankers. Bank of America’s fixed-income and equities sales and trading units can expect them, too — although the levels for those were not explicitly spelled out in Friday’s report. Revenue from equities sales and trading rose about 23% for the bank in 2021’s first nine months. When fixed income — which lost 9% in those same months — is figured in, the trading divisions’ revenue rose 2% from a year earlier but was up more than 20% over 2019.

Moynihan is predicting Bank of America’s markets business will achieve full-year results on par with 2020, which featured a decade-high fourth quarter.

“We’re right around those levels and we’ll see how it ends up,” Moynihan told Bloomberg last month.

That segment’s 2020 numbers represented a 50% jump over 2019, lending credence to the philosophy that this year’s bonus pool is rewarding two years’ efforts.

Pay consultancy Johnson Associates in November predicted Wall Street banks would pay out 30% to 35% more this year in bonuses for investment bank underwriters than last, and a 20% to 25% year-over-year increase for investment banking advisers and equities traders. That would still mark the largest single-year increase since 2009.

But with now three of the six largest U.S. banks rumored to boost bonuses by a greater margin, the ceiling may need adjustment.