Summary
This 8-K filing from Bank of America (BAC) on January 31, 2011, details executive compensation decisions made by the Compensation and Benefits Committee and the Board of Directors for the fiscal year 2010 and awards for the upcoming year. A key takeaway is that no cash incentive bonuses were awarded to executive officers for 2010 performance, reflecting a challenging year for the company. However, base salaries for certain named executive officers, including Charles H. Noski, Joe L. Price, and Thomas K. Montag, were increased, while CEO Brian T. Moynihan's salary remained unchanged. The report also outlines long-term incentive awards, primarily in the form of Cash-Settled Stock Units (CSUs) and Performance Contingent Restricted Stock Units (PRSUs). These awards have varying vesting and payment structures, with PRSUs contingent on the company achieving pre-established performance goals. The company also disclosed its intention to enter into hedging transactions for a significant portion of these RSU awards to mitigate the impact of stock price fluctuations on compensation expense.
Key Highlights
- 1No cash incentive bonuses were paid to named executive officers for fiscal year 2010 performance.
- 2Base salaries for Charles H. Noski, Joe L. Price, and Thomas K. Montag were increased to $850,000, effective January 1, 2011.
- 3CEO Brian T. Moynihan did not receive a base salary increase.
- 4Long-term incentive awards include Cash-Settled Stock Units (CSUs) and Performance Contingent Restricted Stock Units (PRSUs).
- 5PRSUs are conditioned on the company's attainment of pre-established performance goals over a rolling four-quarter period.
- 6Significant long-term incentive grants were made, with Thomas K. Montag receiving the largest PRSU award ($14.3 million).
- 7Bank of America intends to hedge approximately $1.3 billion of RSU awards to manage stock price volatility impact on compensation expense.