NEW YORK — Brian Moynihan, the CEO of Bank of America Corp., received compensation valued at $1.25 million in 2010, according to an Associated Press analysis of regulatory filings.
Moynihan received a salary of $950,000 and no stock or cash bonus for 2010. The bank also granted Moynihan $9.05 million in “restricted stock unit awards,” which he will receive if the bank meets certain targets. That amount wasn’t reflected in 2010 compensation.
2010, Moynihan’s first year at the helm of BofA, was marked by tumult: a sharp increase in lawsuits, mounting losses from credit cards and decreased income from checking accounts. Bank of America reported a loss of $3.6 billion for the year.
As new regulations took hold, the Charlotte, N.C. bank’s credit card unit took a $10.4 billion write-down. The bank also paid $2.8 billion late last year to the government-owned mortgage companies Fannie Mae and Freddie Mac to settle claims the bank sold them defective home mortgages. It also set aside another $1.5 billion for litigation expenses related to bad mortgages.
More recently, Bank of America became the only one of the four largest U.S. banks that wasn’t allowed by the Federal Reserve to increase its dividends. Moynihan had promised investors that he would increase dividends later this year.
Bank of America, along with the 19 largest banks in the country, was subject to a “stress test” by the Federal Reserve to see if they were strong enough to stand up to another economic downturn. Only banks that passed the test were allowed to increase dividends.
The Fed has now asked the bank to submit a revised plan.
BofA’s stock has lagged its competitors in the last year and has remained relatively flat in 2011.
The awards that Moynihan and some other top executives are getting will only be paid out if the bank meets certain targets for profitability as measured by return on assets, or the bank’s income divided by the total amount of assets.
The executives won’t receive any of the awards if that measure falls below 0.5 percent. Last year BofA’s return on assets was minus 0.1 percent, according to FactSet.
The awards, valued at $9.05 million for Moynihan, start to kick in when return on assets is at least 0.5 percent and will be paid out in full if that measure reaches 0.8 percent. Moynihan could stand to earn the entire award in one year if that top bracket is met.
The guidelines call for 40 percent of the awards to be delivered in cash and the rest in stock. The cash portion would be paid out the year after a target is met, but any stock portion would be held until March 2014
Moynihan’s perks totaled $270,234. The bulk, or $233,386, was for the use of its corporate aircraft, and the rest came from matching contributions to his retirement plan, home security system expenses and tax preparation.
Moynihan’s 2009 compensation totaled $6.06 million and included a $5.2 million stock bonus.
The Associated Press formula calculates an executive’s total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.
The value that a company assigned to an executive’s stock and option awards for 2010 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company’s stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.