Bank of America's Brian Moynihan might want to try new pay negotiation tactics 🤨
While the rank and file at Bank of America's investment bank don't seem overly upset about their bonuses for 2023, BofA CEO Brian Moynihan has more reason for feeling undervalued compared to his CEO peers.
Bank of America revealed Moynihan's 2023 pay in its 8k filing on Friday. His total compensation for last year was trimmed to $29m, down from $30m in 2022, a decline of 3.3%.
While Brian is being paid less, some of his fellow US banking CEOs are being paid more. We don't know yet what Jane Fraser at Citi or David Solomon at Goldman Sachs are receiving for last year, but Jamie Dimon at JPMorgan was awarded $36m (up 4%) and James Gorman at Morgan Stanley got $37m (up 17%).
Bank of America's share price bumped around in 2023, ending the year roughly where it started. Morgan Stanley's did much the same. JPMorgan's rose 19%.
JPMorgan's share price helps explain the bank's gushing praise and pay rise for Jamie Dimon. Morgan Stanley's gift to Gorman seemed more like thanks for 14 years of service and a last hurrah before he ceded to new CEO Ted Pick, than compensation for last year's performance.
BofA's board seemingly saw no reason to make Moynihan a happier man. Worse, they cut his pay for the second year running: in 2021, Brian was bestowed $32m; in 2022 this fell to $30m; last year, it was $29m instead. Throughout, Moynihan's cash bonus has been zero.
What's Brian Moynihan doing wrong? Seemingly nothing. When it cut his pay for 2022, the board praised him for the bank's "continued success" and for his "leadership under this operating model, particularly in this period of considerable economic uncertainty." When it revealed his pay cut for last year, Moynihan was praised again in identical terms.
The real problem, therefore, might lie beyond performance. BofA is paying Moynihan less simply because it can. 64-year-old Moynihan has indicated his intention of carrying on as CEO at Bank of America for years to come, thereby breaking the fundamental rule of bonus negotiations: always ensure that management fear you might leave. Instead of complaining about his pay cut last year, Moynihan effectively declared he loves his job. That may be true, but it's not good when your bosses know that.
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