Bank of America again awards restricted stock to rank and file

Jump Summary:

  • Bank of America is once again giving restricted stock awards to its rank and file employees, according to a memo seen by Bloomberg and Reuters on Tuesday.
  • About 96% of the bank’s nearly 217,000 workers are eligible for the awards. Employees who receive $500,000 or more do not receive full annual pay per year, according to the memo.
  • This is the sixth year in a row that Bank of America has given out restricted stock awards, although it’s only the second year that employees making less than $100,000 per year have been included. Bank of America gave those employees cash bonuses worth $1,000 per year from 2017 to 2019, and $750 in 2020.

Insights at a Glance:

Bank of America is not the only bank in North America to grant restricted stock to its rank and file, but it may be the largest — and perhaps the most consistent in that effort.

TD in October 2021 gave a one-off bonus of five shares – worth $363 at the time – to all its full-time and part-time non-executive employees based in the US, UK and Canada – in recognition of their “extraordinary efforts” across the COVID-19 pandemic.

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BNY Mellon said last month that it would award 10 shares – worth a total of about $460 – to each of its eligible rank and file employees. The shares would go into Fidelity accounts for about 90% of the staff, the bank said.

Bank of America did not appear on Tuesday to detail the value of the awards. Last year employees received bonuses ranging from 65 to 600 restricted stock units, and the bank said the incentives added up to about $1 billion.

In this year’s memo, the Charlotte, North Carolina-based bank indicated that its awards total more than $4 billion over six years. A bank spokesperson told Bloomberg last year that the five-year total added up to $3.3 billion. That means this year’s awards are at least $700 million but could be less than last year.

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That would be understandable. Bank of America’s profit fell about 14% last year to $27.5 billion from $32 billion in 2021, according to Bloomberg.

“In times of change in the global economy, we have continued to manage our company for the long term and do what we do best,” CEO Brian Moynihan said in a memo Tuesday. “We invested in our people, our digital capabilities and the physical spaces where we work together and support our clients, while reinforcing our commitment to managing costs for the long term.”

The large-scale investment in talent is at odds with efforts by some banks to divest talent. Morgan Stanley, Goldman Sachs and Capital One have all indicated in the past month or so that they would lay off more than 1,000 employees in response to lower revenues and profits, the continued threat of recession, and the number of people who came advanced amidst a strong workload. in the year 2021.

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In contrast, Bank of America has no plans for widespread job cuts, a spokesperson told Banking Dive last week. But executives have been told to freeze hiring except for the most important jobs, according to Bloomberg. The bank will hold off on introducing a new magazine until at least the middle of the year or until the economy improves, sources told the wire service.

BNY Mellon, however, has indicated that staff cuts and rank-and-file rewards could be combined. About a month after announcing its incentive for the vast majority of staff, the bank said it would lay off around 1,500 workers in 2023.

Stock awards aren’t the only effort Bank of America has made to retain its lowest-compensated employees. The bank last year increased its minimum wage to $22 an hour from $21 as part of a move to reach a minimum wage of $25 an hour by 2025.

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