Bank of America (NYSE:BAC) has carried the flag for the surging financials this year, gaining about 70% — almost enough to make us forget how lousy the institution fared in 2011.
But for those of you who have forgotten, Bank of America took an absolute shellacking last year, to the tune of almost 60%, with shares falling from a high above $15 to around the $5 mark. And while the company eventually managed to post a full-year profit for 2011, it came amid an extremely rocky year. And because Brian Moynihan piloted that mess, BofA indicated it will dock his pay this year. Sort of.
Fortune Senior Editor Stephen Gandel aptly sums up the situation as such:
“The quirk in when Moynihan will take his lumps has to do with how Bank of America structures its pay. In its annual proxy statement, which the bank filed on Wednesday, Bank of America said it paid its CEO nearly $8.1 million in 2011. That was up from $1.9 million in the year before. That makes it look like Moyniham (sic) got a huge pay raise.
But according to the proxy much of that pay is a reward for 2010 performance, not 2011. That’s because the company paid out the shares that Moynihan received for 2010 in early 2011. So for the SEC and indeed the IRS, that pay shows up as 2011 compensation, not 2010. If you look at just the pay that the company says Moynihan earned for his performance in 2011, then the CEO took a pay cut. The company says it plans to pay its CEO only $7 million, down $3 million from the $10 million he earned in 2010.”
Gandel continues on, but in short, thanks to some fuzzy math, Bank of America will be able to finagle its way to paying Moynihan the absurd monies he has become accustomed to while giving off the idea that it’s somehow punishing him.
I’m sure many will be pleased to hear this, considering this is the same guy who…
- Helped lead shareholders to the woodshed last year — and again, even around $9.50 a share now, BAC still has clawed only halfway back to its 2011 peak.
- Who tried to punch $5 debit-card fees through last year and needed a mass exodus of customers to make him finally retreat from his strategy.
- Who chastised those critical of the company’s role in the mortgage crisis, debit-card fees and other underhanded actions, citing all of the charitable actions of its employees.
Money well spent, BofA. Whenever it’s technically spent.
— Kyle Woodley, InvestorPlace Assistant Editor