Bank of America Corporation Filed a Form 8-K

CHARLOTTE, N.C.--(BUSINESS WIRE)--Bank of America Corporation (the "Corporation") filed a Current Report on Form 8-K with the U.S. Securities and Exchange Commission ("SEC") on February 7, 2020, announcing that its Board of Directors (the “Board”) has approved 2019 total compensation for Chairman and Chief Executive Officer Brian T. Moynihan of $26,500,000. The amount and structure of Mr. Moynihan’s compensation is unchanged from last year.

In determining this compensation, the independent members of the Board considered the Corporation's strong performance in 2019, including full-year reported net earnings of $27.4 billion (which were decreased by a $1.7 billion non-cash after-tax impairment charge related to the Corporation's notice to the merchant services joint venture partner of the termination of the joint venture upon the conclusion of its current term) and net earnings (excluding the impairment charge) of $29.1 billion.¹ On a reported basis, the Corporation continues to deliver strong returns: Return on Assets was 1.14% while Return on Equity was 10.6%.

Returns to shareholders in 2019 included a 22% increase in dividends per common share as compared to 2018. Total capital returned to common shareholders, including share repurchases, was more than $34 billion, 34% higher than 2018. Additionally, the Corporation's stock price improved 42% in 2019, besting both the average of its primary peers and the S&P 500 Index not only on a 1-year basis but also on a 3- and 5-year basis. This performance marks a decade in which Bank of America’s market capitalization more than doubled to over $300 billion.

Mr. Moynihan’s compensation structure continues to be composed of base salary, time-based restricted stock units (“RSUs”), and performance RSUs. Mr. Moynihan’s annual base salary remains $1.5 million. The aggregate value of his 2019 equity incentive award is $25 million. Consistent with prior years, there is no cash bonus; the incentive is comprised 30% of cash-settled RSUs that will vest over the next 12 months, 20% of stock-settled RSUs that will vest annually over the next three years, and 50% of performance RSUs that will be earned only if Bank of America’s future financial performance meets specific standards.

The performance RSUs awarded to Mr. Moynihan continue to use a “re-earn” approach, vesting only if the Corporation meets performance standards over a three-year period. Under this “re-earn” approach, future adverse performance of the Corporation below the standards of the performance RSUs will decrease the amount ultimately paid. The metrics and standards for the performance RSUs are also unchanged from last year. The “re-earn” structure of Mr. Moynihan’s 2019 performance RSUs is consistent with the prior seven years, during which time the annual advisory “Say on Pay” shareholder vote regarding the Corporation's executive compensation program has been approved with an average of 94.5% support.

Additionally, all of Mr. Moynihan’s 2019 equity incentive awards are subject to Bank of America’s stock ownership and retention requirements. Specifically, 50% of the net after-tax shares he receives from equity awards must be retained until one year after his retirement. These equity awards also are subject to Bank of America’s clawback policies.

Bank of America Corporation makes available all of its SEC filings on its website: http://investor.bankofamerica.com/phoenix.zhtml?c=71595&p=irol-irhome.

The SEC maintains a website that contains reports, proxy statements and other information regarding issuers that file electronically with the SEC. These materials may be obtained electronically by accessing the SEC’s website at http://www.sec.gov. A copy of the document will also be available on the National Storage Mechanism's website at: http://www.morningstar.co.uk/uk/NSM.

 

---

¹ Represents a non-GAAP financial measure, which we believe provides additional clarity in understanding results of operations and comparing operational performance between periods.