Bank of America Corp said on Tuesday it would pay special compensation to about 97% of its employees, most of which would be distributed in restricted stock units, according to an internal memo seen by Reuters.
The total value of the awards is approximately $1 billion, reflecting a 47% increase in Bank of America’s share price last year, the bank’s chief executive officer Brian Moynihan wrote to employees.
“For this year, the estimated value of these awards is several times higher than prior cash prizes,” Moynihan wrote. This is the fifth year that the bank has issued a compensation award.
Rewards will be awarded to eligible bank employees earning an annual total compensation of $500,000 or less. Employees will receive between 65 and 600 restricted units of Bank of America stock, depending on the compensation, which will begin vesting next year.
Restricted stock units are stock-based indemnities that are transferable only if certain conditions are met.
Separately, some part-time employees and others working in certain international locations will receive a cash prize of $750 or its equivalent in local currency, according to the memo.
This is the first year the bank has issued stock awards to employees earning less than $100,000, and it follows the bank’s commitment last year to raise the hourly minimum wage for employees to $25 by 2025.
Large banks offer stock rewards during bonus season, some of which reward employees handsomely for retaining talent in the midst of tough competition.
Goldman Sachs raised its annual bonus pool for top-performing investment bankers from 40% to 50%, while JPMorgan Chase increased it from 30% to 40%, as Reuters reported earlier in January.
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