http://www.charlotteobserver.com/2010/02/27/1276388/bofa-exec-pay-remains-hot-button.html

Bank of America executive pay remains hot-button subject

Leaders' compensation in '09 ranged from $6 million to $29.9 million

Bank of America's current top executives are
pulling down pay ranging from $6 million to nearly $30 million for
2009, amounts that critics say illustrate the disconnect between Main
Street and bank executives.

The
new chief executive of the Charlotte bank, Brian Moynihan, received
total compensation of about $6 million last year, up from about $3
million in 2008, according to a proxy filing Friday afternoon.

The
biggest pay package disclosed went to Tom Montag, a Wall Street veteran
from Merrill Lynch, who received total compensation of $29.9 million.

Former
CEO Ken Lewis, who stepped down Dec. 31, will leave the company with at
least $70 million in pension benefits, stock and other compensation.

Lewis
received no pay in 2009 except for "other compensation" worth $32,171,
largely for tax preparation and financial planning services. Under fire
for his purchase of Merrill Lynch, he agreed last fall to give up his
2009 pay as part of an agreement with the Obama administration's pay
czar.

The bank points out that "stock salary" units make up
the vast majority of executives' pay for 2009, in line with
recommendations from pay czar Ken Feinberg.

"Even though
it's tied up in stock ... that's still a ton of money that they're
raking in," said Richard Clayton, research director at the CtW
Investment Group.

Other disclosures in the filing include
that former chief risk officer Greg Curl, who vied with Moynihan for
the CEO post, will retire at the end of March. The board of directors
will shrink to 13 members, with chairman Walter Massey leaving in April.

And
the bank is not renewing a retirement agreement with director Chad
Gifford, a perk that gave him more than $1 million last year in
personal use of company-provided airplanes.

Bank executives'
pay is a hot-button issue for many lawmakers and shareholders. But
bankers' pay also greases the skids of the Charlotte economy,
supporting everything from charities to restaurants.

The $6
million pay for Moynihan was up significantly in 2009 compared to the
year before, even though the bank lost money for the year.

Moynihan,
who was head of consumer banking before becoming CEO on Jan. 1,
received a salary of $800,000, plus a stock grant worth $5.2 million
and other compensation of $36,248. He received no bonus.

The
bank said the executives' stock salary units are payable in monthly
installments spread out over three years. They do not pay dividends,
and the bank reserves the right to reclaim them if it discovers that
the executive "engaged in certain detrimental conduct" that hurts the
bank.

Feinberg and shareholder activists encourage companies
to pay their executives largely in stock, because it ties the fortunes
of the leaders to that of their shareholders and influences them to
consider the company's long-term interests.

But CtW's Clayton and another corporate-governance expert said Friday that Bank of America's changes in pay structure aren't enough. The sheer size of the payments, they said, is a problem that is endemic throughout the industry.

Charles
Elson, at the University of Delaware's Weinberg Center for Corporate
Governance, praised the bank for tying pay more closely to the stock
price. But, he said, it still appears that the board is ignoring the
sentiments of shareholders.

"The shareholders of this
company have taken a shellacking," said Elson, who is a shareholder.
"There's been basically no dividend, there has been a tremendous drop
in value (in the stock price) compared to two years ago, and there's
little sign that it will come back. You have to wonder if anyone merits
an increased package."

The $29.9 million package for Montag,
president of global banking and markets, came almost entirely from
stock grants. It includes $20 million in restricted stock given out in
January 2009 under a 2008 contract with Merrill Lynch. Montag's Merrill
stock grant vests over three years, with the first third vesting this
January.

The proxy also outlined the bundle of benefits and
stock holdings Lewis carried with him into retirement after a
four-decade career with the bank.

At the end of December,
his pension benefits tallied $57.4 million and his deferred
compensation accounts held $11.4 million. His unvested restricted stock
and options will continue to vest on their original schedule. As of
Dec. 31, his unvested restricted shares were worth $4.6 million and his
733,333 unvested stock options were worthless.

The
restricted stock and stock options will become vested as long as Lewis
doesn't go to work for certain competitors during the original vesting
period.

Lewis also has a life insurance policy that, as of
Dec. 31, would pay his beneficiary $10.3 million upon the death of both
Lewis and his wife. The bank recoups the premiums it has paid at that
time.

Last year, the bank had to submit its pay plans for
the top executives to pay czar Feinberg because it had received $45
billion in government loans. Those restrictions lifted when the bank
paid back the money in December.

Since then New York
Attorney General Andrew Cuomo filed civil charges against the bank,
Lewis and former CFO Joe Price, alleging they intentionally misled
shareholders about Merrill's losses before a December 2008 vote to buy
the bank. The bank and executives say the allegations are false and
they will fight the charges.

In the filing, the board's
compensation and benefits committee said it will follow its own pay
practices in 2010, not those outlined by the pay czar.

The
bank said it will discontinue stock salary awards in 2010 and, as
previously disclosed, said it set Moynihan's 2010 cash salary at
$950,000, while Montag and Price will receive $800,000 each in cash
salary.

The Observer calculates compensation as salary,
stock awards, bonus and options exercised. Top Bank of America
executives did not give themselves a bonus for 2009. They also did not
exercise any options.

More on the disclosures:

Chief
risk officer Curl's departure at the end of March marks the second
Lewis confidant to announce his retirement this year, joining chief
administrative officer Steele Alphin.

Curl is assisting in the transition of his risk duties and on consulting on possible strategic partnerships, the bank said.

He
will be eligible for a partial discretionary incentive award for 2010
but will not be eligible for any cash severance payments under a
contract he entered before a Bank of America predecessor bought
Boatmen's Bancshares Inc. in 1997.

The
shrinking of the board by two members to 13 sets a new fixed size.
Joining chairman Massey in stepping down after the annual meeting is
Tom Ryan, who is CEO of CVS/Caremark Corp. Massey is about to reach the
mandatory retirement age of 72.

Corporate governance experts praised the move; they tend to believe that bigger boards can be lethargic and ineffective.

Early
last year, angry regulators and shareholders blamed the board for many
of Bank of America's failings, saying the directors never pushed back
on the executives' requests. The board has undergone a major overhaul
since then under government pressure, shrinking from 18 members.

The
board didn't say who the new chairman will be; it probably won't make
an announcement at least until the annual meeting on April 28. The
board cannot pick CEO Moyniha