by: To contact the reporter, e-mail Updated:CHARLOTTE, N.C.,None — Bank of America is giving out billions in bonuses despite a rough 2009.
Eyewitness News was told the bank will hand out $4.4 billion in bonuses for last year, and CEO Brian Moynihan is getting a 19 percent raise -- from $800,000 to $950,000.
The bonuses rub some non-bankers the wrong way, especially because Bank of America borrowed billions in bailout money, reported $5.2 billion in losses the last quarter and still plans to lay off more than 30,000 employees worldwide over the next three years.
"I'm not happy about it, but I'm not surprised," one Charlotte resident said.
Another, James Dixon, said, "(The people getting the bonuses are) going to get fat -- get rich -- while everyone else is struggling."
But economic experts say Bank of America rewards success and doesn't want to lose employees who add to the bottom line -- in this case, the investment bankers and traders it snagged when it merged with Merrill Lynch.
While the bank doesn't discuss bonuses publicly, spokeswoman Kelly Sapp gave Eyewitness News a general idea of how compensation works.
She e-mailed Eyewitness News, saying, "Associates set performance goals with their manager early in the year, and then meet with their managers to discuss the progress of those goals several times throughout the year. At the end of the year, their incentive compensation is based on a combination of company and business results and the associate's performance. Again, the bank's compensation plans have an appropriate mix of salary, benefits and, for some roles, incentives paid over time that properly align the individuals' role and responsibility with stockholder interests."
In fact, finance expert Tony Plath said $4 billion is lower than usual.
"The bank has to pay sufficient compensation to keep the people at Merrill Lynch from going to JP Morgan or going to Wells-Wachovia or going to Citigroup or going to a European investment banking firm, because those guys did generate a lot of revenue and a lot of profitability for the overall company last year," Plath said.
Plus, most of the bonuses are in the form of stock the employees can't sell for three years, and the company reserves the right to take it back if the same bankers don't keep up the good work.
Most of these bankers are in New York, so Charlotte probably won't see any bankers celebrating by spending money here.