8-KOther Events

BANK OF AMERICA CORP /DE/ 8-K Report, Corporate Update (Feb 2, 2024)

Filed February 2, 2024For Securities:BACBAC-PBBAC-PKBAC-PLBAC-PMBAC-PNBAC-PSBML-PJBAC-PEBAC-PPBAC-PQBACRPBML-PGBML-PHBML-PLBAC-POMER-PK

Summary

Bank of America Corporation (BAC) announced in an 8-K filing that its Board of Directors approved 2023 total compensation for Chair and CEO Brian T. Moynihan of $29,000,000, a slight decrease from $30,000,000 in 2022. This decision was based on the Board's evaluation of the company's performance and Mr. Moynihan's leadership amidst economic uncertainty, under the "Responsible Growth" operating model. The company reported $26.5 billion in net income for 2023, which included significant pre-tax charges totaling $3.7 billion related to the FDIC special assessment and a Bloomberg Short-Term Bank Yield Index cessation. Excluding these items, net income was $29.3 billion, a 6% increase year-over-year, reflecting strong organic growth and diligent expense management.

Key Highlights

  • 1CEO Brian T. Moynihan's total 2023 compensation set at $29 million, down from $30 million in 2022.
  • 2Company net income for 2023 was $26.5 billion, with an adjusted net income of $29.3 billion (6% increase) after excluding $3.7 billion in pre-tax charges.
  • 3Strong balance sheet noted with approximately $292 billion in shareholders' equity and $897 billion in liquidity.
  • 4Returned $12 billion to shareholders in 2023 through dividends and common stock repurchases.
  • 5Raised the minimum hourly wage for U.S. employees to $23, with a commitment to reach $25 by 2025.
  • 6Generated $8 billion in loan growth, exceeding $1.05 trillion in total loans.
  • 7Wealth Management saw record net new relationships (40,000) and strong client balances ($5.4 trillion).

Frequently Asked Questions

The Board of Directors evaluated the company's performance and CEO Brian T. Moynihan's leadership in delivering "Responsible Growth" in 2023, particularly in a period of economic uncertainty. While overall net income decreased, adjusted net income showed growth, and the company maintained a strong balance sheet and liquidity.

Bank of America reported significant pre-tax charges of $3.7 billion related to the FDIC special assessment ($2.1 billion) and a Bloomberg Short-Term Bank Yield Index cessation ($1.6 billion) in the fourth quarter of 2023. Excluding these items, the company's net income increased by 6% compared to 2022.

The CEO's compensation consists of a base salary ($1.5 million) and equity incentives totaling $27.5 million. This equity is composed of cash-settled RSUs (30%), stock-settled RSUs (20% vesting over four years), and performance RSUs (50%). The performance RSUs use a "re-earn" approach, vesting only if specific three-year performance standards (average return on assets and average growth in adjusted tangible book value) are met from 2024-2026.

The company invested in employees by raising the minimum wage to $23/hour and enhancing benefits like childcare and wellness programs. A new sabbatical program was introduced for long-serving employees, and approximately 97% of employees received "Sharing Success" awards. Philanthropic investments reached nearly $290 million, and employees contributed over 2.4 million volunteer hours.