The bank’s CFO said on Friday: “In January, we made a change in one element of a portion of our incentive comp paid in 2020. The alteration will shift into this quarter costs that would have been incurred anyway over the next four years, so it’s just an acceleration in Q1.”
Recall, we had reported earlier this month that the change in bonuses was causing “internal drama” at the bank.
The bonuses in question are shares that are granted to executives who earn $1 million or more. Instead of shares vesting in equal parts over a timeframe, they now all vest only at the end of four years. The new rules were supposed to be applied broadly, but it has been revealed that many top investment banking and trading veterans spoke out against having to wait 4 years for their bonuses. As a result, management agreed to exempt them. CEO Brian Moynihan said on January 27 that the new policy “didn’t work the way some people wanted it to, so we fixed it.”
Chief Financial Officer Paul Donofrio also said on Friday that the bank is expecting declining loan levels to be a headwind for net interest income, comprised of revenue from customer loan incomes minus what the bank pays depositors.
He said: “It puts more pressure on the near-term NII, but not as much on the full year, assuming we see some loan growth turn around in the second half. Still we expect the second half of ’21 should be demonstrably better than both the first half of ’21 and the second half of 2020.”
Mon, 03/01/2021 – 23:00
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Author: Tyler Durden