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Bank of America Chief Executive Took 7% Pay Cut in 2014
Bank of America’s chief executive, Brian T. Moynihan, took a 7 percent pay cut in 2014, as the giant bank faced mounting legal costs related to government investigations into the sale of mortgage investments leading up to the financial crisis.
Mr. Moynihan was awarded $13 million in stock and cash last year, according to the bank’s proxy statement released Thursday. That was down from the $14 million he received in 2013.
And again, the head of the firm’s investment bank, Thomas K. Montag, was paid more than his boss. Mr. Montag was awarded $14 million in compensation, down from $15.5 million in 2013.
Last year was challenging for Bank of America and many of its Wall Street peers, as the banks settled years-long investigations with the Justice Department over shoddy mortgage-backed securities in the lead up to the financial crisis.
In August, Bank of America agreed to a $16.65 billion settlement with federal prosecutors to end inquiries into a mortgage cases that largely centered on the conduct of its Countrywide Financial and Merrill Lynch units. That price tag, which at the time was the largest settlement in corporate history, weighed on the bank’s profits last year, although the deal represented the last big legal issue stemming from the financial crisis.
Perhaps as big a challenge for Bank of America last year was how to increase its revenue amid low interest rates and rising regulatory costs. With those pressures showing no signs of abating, some investors fear that the near-term future for Bank of America and other large banks looks rocky.
Still, Bank of America’s board gave a ringing endorsement of Mr. Moynihan’s leadership by granting himthe combined role of chief executive and chairman last year.
In explaining the rationale for the move, the bank’s board said Mr. Moynihan had “rebuilt capital and liquidity, streamlined and simplified its operations, reduced the scope of activities by exiting non-core businesses and products, stabilized performance, increased the return of capital to stockholders, settled its most significant legacy mortgage-related litigation matters, and reduced expenses.”
The bank’s annual shareholder meeting is scheduled for May 6 in Charlotte, N.C.
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