© 2019 SourceMedia. All rights reserved.

BofA to pay special bonuses for second year after tax cuts

Bank of America plans to reward staff with special bonuses for a second straight year after seeing profits soar on tax cuts and a focus on expenses that’s eliminated thousands of jobs in recent months.

The lender will give $1,000 cash bonuses in December to eligible employees making less than $100,000 annually, CEO Brian Moynihan said in an internal memo. Many higher-paid employees will receive a stock award early next year. He cited the company’s record quarterly profit as a reason for the payouts.

“Last year, approximately 90% of our teammates received such an award; this year, that figure will increase to approximately 95%,” Moynihan wrote of the bonuses.

Bank_of_America_glass_window_Bloomberg
Bank of America Corp. signage is displayed at a branch in New York, U.S., on Tuesday, Sept. 3, 2013. Bank of America Corp. rose in New York trading after setting a $1.5 billion goal for its sale of China Construction Bank Corp. shares, a deal that will end an eight-year investment in the Chinese lender. Photographer: Ron Antonelli/Bloomberg via Getty Images

Special bonuses are one way banks have been reacting to a Republican tax overhaul that was particularly generous to their industry. Collectively, large U.S. banks have been ramping up payouts to investors and staff, while often continuing to pare their workforces. Bank of America had almost 204,700 employees at the end of September, or about 4,700 fewer than at the end of 2017 — one of the industry’s most dramatic reductions.

The bank’s long focus on expenses reached a milestone last quarter, as headcount fell below the level it was at in the second quarter of 2008, before its crisis-era acquisitions of subprime lender Countrywide Financial and investment bank Merrill Lynch.

The special stock awards — between 200 and 500 restricted shares per worker — will be given to employees earning between $100,000 and $350,000 in annual compensation, delivered over four years, according to the memo.

Last year, a number of U.S. companies including Wells Fargo, Fifth Third Bancorp, AT&T and Comcast also handed out bonuses tied to the tax plan.