Bank of America Corp. (BAC), the second- biggest U.S. lender by assets, told its investment bankers to expect compensation packages that are 25 percent smaller on average, said two people with knowledge of the discussions.
Executives gave the guidance earlier this month ahead of formal 2011 pay discussions scheduled for this week, said the people, who declined to be identified because the talks are private. The compensation cut includes salary and bonus, the people said. Jessica Oppenheim, a spokeswoman for the Charlotte, North Carolina-based company, said she couldn’t comment.
Wall Street firms are curbing pay for investment bankers and traders as the companies succumb to revenue and regulatory pressures. Bank of America Chief Executive Officer Brian T. Moynihan, 52, is scouring the global banking and markets unit for expenses to cut after a 58 percent stock plunge last year.
Bank of America reported a second consecutive loss at its investment bank in the fourth quarter as Thomas K. Montag’s division posted a $443 million deficit. That followed a $302 million loss in the preceding three months.
By Esteban Duarte and Hugh Son
Courtesy of Bloomberg News