Bank of America has announced a 3.3% reduction in the compensation package of its CEO, Brian Moynihan, for the year 2023. The bank's decision comes in the wake of a 4% decline in its annual profit, a trend detailed in a filing released on Friday.
This adjustment brings Moynihan's total earnings for the year down to $29 million, a modest decrease compared to his $30 million earnings in 2022 as reported by Reuters.
In contrast to Bank of America's move, JPMorgan Chase has taken a different stance by awarding its CEO, Jamie Dimon, a 4% pay increase. Dimon's total compensation for 2023 now stands at $36 million, showcasing a departure from the reduction seen at Bank of America.
Additionally, Morgan Stanley has opted for a substantial 17% raise for Executive Chairman James Gorman, bringing his total compensation to $37 million for his final year as CEO.
Bank of America's board justified the adjustment in Moynihan's compensation by highlighting his leadership skills and the company's overall success during what they referred to as "a period of considerable economic uncertainty."
Despite the 4% contraction in the bank's annual profit, the board acknowledged Moynihan's instrumental role in steering the company through challenges and maintaining stability.
The decline in Bank of America's profit was attributed to a combination of factors, including $3.7 billion in one-off charges and a slide in interest income.
The latter was a consequence of increased expenditures aimed at retaining customer deposits. Despite these challenges, executives at Bank of America expressed optimism regarding the U.S. economic outlook, emphasizing the resilience observed among consumers in the face of economic uncertainties.
In summary, Bank of America's decision to decrease Moynihan's compensation reflects a strategic response to the bank's diminished annual profit.
Meanwhile, competitors such as JPMorgan Chase and Morgan Stanley have chosen to increase executive pay, each citing their own justifications within the dynamic landscape of the financial sector.
03.02.2024
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