Bank of America Pays Out Near-Record $4 Billion Bonuses
February 3, 2010
(ChattahBox)—-As Americans struggle to obtain loans to purchase homes, while others lose their homes to foreclosure. And small businesses continue to fail, due to the drying up of bank credit and consumers become hit, during a rescission with increasing bank and credit card fees, it’s good to see that Bank of America executives are not feeling the pinch like the rest of us. According to the Wall Street Journal, Bank of America is about to pay out more than $4 billion in year end bonuses, with investment bankers and traders each receiving about $300,000 to $500,000. The massive payout nearly reaches the record-busting bonuses of 2006, when a total of $6.5 billion was paid, representing 27 percent of total revenue. The bonus payout for 2009 represents about 19 percent of Bank of America’s revenue. Not to worry though, under the conservative theory of trickle down economics, we should all be benefiting soon, with more jobs and an increase in hiring, right?
A Bank of America spokesman defended the near-record payout. “We tried in determining year end compensation to balance the need to pay competitively with the need to recognize the general concerns about the level of compensation on Wall Street,” he said.
There is one difference in the bonus payouts for 2009 compared to past years. A majority of the bonuses are structured on deferred cash payments and stock options. The deferred cash will be paid out over three years. And the restricted stock will vest over a year and a half, barring workers from selling it immediately.
Source: Wall Street Journal