Bank of America employees in Hong Kong and globally will see a little bit extra in their pay cheques after the American bank posted better-than-expected results in the fourth quarter despite the economic fallout from the coronavirus pandemic.
Employees who make US$100,000 or less annually will receive a cash bonus of US$750, with overseas employees receiving the cash payments in March, according to an internal memorandum seen by the Post.
Bank of America employees who earn more than US$100,000 to US$500,000 in total compensation will receive 150 to 750 restricted stock units, the memo said. The awards will have a grant date of March 1 and be paid out over a four-year period beginning in 2022.
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“Your work has spanned from helping families and small businesses access critical financial relief when they needed it the most, to proactively reaching out and providing financial advice, guidance and services – what we do best – to individual, business and institutional clients during some of the most volatile times in the global markets,” Bank of America CEO Brian Moynihan said in the memo.
The awards are on top of regular annual incentives paid out to eligible employees, with about 97 per cent of the staff receiving cash or restricted share units.
It follows moves by the bank to increase compensation for its lowest paid employees in the US to a minimum of US$20 an hour last year and to provide additional reimbursements for child and elder care expenses during the pandemic.
The bonuses come as banks are struggling with how to balance compensation, as parts of their businesses, such as trading and underwriting flourished last year, while the overall operating environment proved difficult because of a combination of historically low interest rates and slower growth because of the pandemic.
Morgan Stanley, for example, said in December it would give US$1,000 to employees who make less than US$150,000 a year. The investment bank’s profit jumped 51 per cent in the fourth quarter.
This month, HSBC said it would cut year-end bonuses for junior staff by 22.5 per cent for 2020. The bank, which reports its full-year results in February, saw a 62 per cent decline in its profit in the first nine months of 2020, including recording US$7.6 billion in so-called expected credit losses because of weakening business activity.
Banks’ overall compensation – bonuses for the full year 2020 and this year’s pay – is expected to stay flat, with more-muted-than-normal increases for business lines that performed exceptionally well last year, such as trading.
Bank of America itself reported a 22 per cent decline in fourth-quarter profit to US$5.47 billion as lower interest rates weighed on results in its consumer banking and wealth and investment management businesses.
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