8-KLeadership Changes

BANK OF AMERICA CORP /DE/ 8-K Report, Executive Changes (Nov 27, 2009)

Filed November 27, 2009For Securities:BACBAC-PBBAC-PKBAC-PLBAC-PMBAC-PNBAC-PSBML-PJBAC-PEBAC-PPBAC-PQBACRPBML-PGBML-PHBML-PLBAC-POMER-PK

Summary

This Form 8-K filing by Bank of America Corporation (BAC) on November 27, 2009, details adjustments to the 2009 compensation for two key executives: Joe L. Price, Chief Financial Officer, and Barbara J. Desoer, President of Mortgage, Home Equity and Insurance Services. These adjustments were made in accordance with the determination by the Office of the Special Master for TARP Executive Compensation. The primary change involves a shift in compensation structure. Both executives received an adjustment to their annual base salary, payable in cash and retroactive to November 1, 2009. More significantly, they were granted "Salary Stock Units" in lieu of a portion of their cash salary. These stock units represent a full year's value for 2009 and are designed to align executive compensation with the company's stock performance while adhering to TARP executive compensation restrictions.

Key Highlights

  • 1Adjustments to 2009 compensation for CFO Joe L. Price and President Barbara J. Desoer were approved by the Board of Directors, based on recommendations from the Compensation and Benefits Committee.
  • 2These adjustments were made in accordance with the determination memorandum issued by the Office of the Special Master for TARP Executive Compensation.
  • 3Both executives received an increase in their annual base salary, effective retroactively to November 1, 2009.
  • 4A significant portion of their 2009 compensation will be delivered as "Salary Stock Units" (SSUs) granted in lieu of cash salary.
  • 5Mr. Price received $5.25 million in SSUs, and Ms. Desoer received $3.95 million in SSUs.
  • 6SSUs are immediately vested upon grant but will be paid out in 36 equal monthly installments starting January 2011.
  • 7Other compensation elements, including perquisites, supplemental retirement plans, non-qualified deferred compensation, severance arrangements, and tax gross-ups, are subject to strict limitations and prohibitions as determined by the Special Master.

Frequently Asked Questions

The main purpose of this 8-K filing is to report on the approved adjustments to the 2009 compensation for Bank of America's Chief Financial Officer, Joe L. Price, and President Barbara J. Desoer. These adjustments were made in compliance with the directives of the Special Master for TARP Executive Compensation.

Both Joe L. Price and Barbara J. Desoer received an increase in their annual base salary, payable in cash, effective retroactively from November 1, 2009. Additionally, a substantial portion of their compensation is being awarded as 'Salary Stock Units' (SSUs) instead of cash.

Salary Stock Units are awards granted in lieu of cash salary, designed to align with the company's stock performance and TARP executive compensation rules. They are immediately vested upon grant. However, they will be paid out in cash in 36 equal monthly installments starting in January 2011. The number of units granted is based on the company's stock price prior to the grant dates (November 30, 2009, and December 31, 2009).

Yes, the filing outlines several other restrictions in line with the Special Master's determination. These include a limit of $25,000 on the aggregate incremental cost of perquisites and other compensation, prohibition of further accruals in supplemental retirement or non-qualified deferred compensation plans for 2009, no increase in severance arrangement amounts, and elimination of tax gross-ups for certain compensation elements.