Dive Brief:
- Bank of America is again giving restricted-stock awards to its rank-and-file employees, according to a memo seen Tuesday by Bloomberg and Reuters.
- Roughly 96% of the bank’s nearly 217,000 workers are eligible for the awards. Employees who receive $500,000 or more in total annual pay per year are not, according to the memo.
- This marks the sixth consecutive year Bank of America has handed out restricted-stock awards, though it’s just 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 each year from 2017 to 2019, and $750 in 2020.
Dive Insight:
Bank of America is not the only North American bank to award 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 all of its full- and part-time non-executive U.S.-, U.K.- and Canada-based employees a one-time bonus of five shares — worth $363 at the time — to recognize their “extraordinary efforts” throughout the COVID-19 pandemic.
BNY Mellon last month said it would award 10 shares — worth about $460 in total — to each of its eligible rank-and-file employees. The shares would go into Fidelity accounts for about 90% of staff, the bank said.
Bank of America on Tuesday did not appear to detail the value of the awards. Employees last year received bonuses ranging from 65 to 600 restricted stock units, and the bank touted that the incentives added up to roughly $1 billion.
In this year’s memo, the Charlotte, North Carolina-based bank indicated its awards have totaled 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 total at least $700 million but may be less than last year’s.
That would be understandable. Bank of America’s profit dropped roughly 14% last year to $27.5 billion from a record $32 billion in 2021, according to Bloomberg.
“In a time of change in the global economy, we continued to manage our company for the long-term and to do what we do best,” CEO Brian Moynihan said in Tuesday’s memo. “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 manage expenses for the long-term.”
The mass-scale investment in talent stands counter to some banks’ talent-divestment efforts. Morgan Stanley, Goldman Sachs and Capital One, in the past month or so, have each indicated they would lay off more than 1,000 employees as a response to lower revenues and profits, the ongoing threat of recession, and headcounts that ballooned amid a robust workload in 2021.
Bank of America, by contrast, does not have plans for widespread job cuts, a spokesperson told Banking Dive last week. But executives have been told to pause hiring except for the most vital positions, according to Bloomberg. The bank will hold off on bringing in new hires until at least midyear or until the economy improves, sources told the wire service.
BNY Mellon, however, has shown that staff cuts and rank-and-file rewards can coexist. Roughly a month after announcing its incentive to the vast majority of it staff, the bank said it would lay off about 1,500 workers in 2023.
The stock awards are not the only effort Bank of America has made to keep its lowest-compensated employees. The bank last year increased its minimum wage to $22 per hour from $21 as part of a move to reach a $25-per-hour minimum wage by 2025.
