Bank of America made the decision to create a stock fund of around US$800 million among the majority of its employeesincreasing compensation to retain staff, even while working to keep expenses in check.
The incentive, which is in addition to regular compensation, is awarded to workers who earn up to $500,000 in total annual salary, according to a Thursday memo from CEO Brian Moynihan. However, around 97% of the global workforce is eligible. This is the firm’s seventh such award payment, totaling more than $4.8 billion since the program began in 2017, according to the memo, which a company spokesperson confirmed.
“The hard work of our colleagues around the world over the past year again produced strong results,” Moynihan said in the memo. “This work allowed us to invest in the future, including in our digital capabilities,” and “in programs and services designed to help our colleagues enjoy long, successful careers with our company.”
BofA: despite layoffs
Earlier this month, the company reported net income of $26.5 billion for 2023, up from $27.5 billion a year earlier. Bank of America has focused its efforts on keeping expenses under control, reducing its workforce by almost 2%reaching 212,985 employees, without facing significant severance payments, as stated by the Financial Director, Alastair Borthwick, in a meeting with analysts after the publication of the results.
Wall Street firms are looking to retain their best talent while controlling costs that have already led to staff reductions or hiring freezes. Faced with a labor shortage and historically low unemployment after the pandemic, financial companies have raised wages and offered other benefits.
In addition to the stock award, a limited group of employees will receive a cash bonus based on compensation and local requirements, according to the memo. Moynihan said the company will provide more details about specific awards to all eligible employees and their managers in February.
Last year, the bank similarly awarded a restricted stock fund to most of its employees. It also raised its minimum wage to $23 in 2023, with a goal of reaching $25 an hour by 2025.
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