Bank of America Corp. (NYSE: BAC) benefited from more than $45 billion in taxpayer bailouts has cut the 2009 salaries of two of its key executives after the U.S. Treasury’s pay czar, Kenneth Feinberg, reviewed the compensation of the bank’s top 13 executives.
In a filing with the Securities and Exchange Commission, Bank of America said that it had cut the salaries of the company’s Chief Financial Officer, Joe Price as well as the president of its mortgage unit, Barba Desoer from $800,000 to $500,000 annually. These cuts are said to have been approved by Kenneth Feinberg, the Treasury’s special master for TARP executive compensation.
Joe Price played a central role in Bank of America’s controversial decision to purchase Merrill Lynch during the peak of the financial crisis. Desoer, who is generally considered a candidate to replace Kenneth Lewis as Bank of America’s next CEO, has been charged with integrating Countrywide Financial Corp, which Bank of America purchased last year.
BofA said that Price will receive $5.25 million in stock-based awards for 2009 and Desoer will receive $3.95 million in stock-based rewards. According to the filing, both executives can begin accepting payments on those awards as soon as 2011. The filing also indicated that those awards may be paid in cash, based on Bank of America’s current stock price.
The company also announced new limits on fringe benefits that Feinberg had called for last month. Specifically, Feinberg ordered Bank of America to limit top executives’ fringe benefits to be no more than $25,000 per year. The bank said on Friday that it had planned to comply with Feinberg’s request. Bank of America said they would also ask executives to repay any benefits exceeding $25,000 that they have received this year.
Last year, Desoer received $2.6 million in benefits when she moved from Charlotte to California to oversee Bank of America’s Countrywide Acquisition. In a March filing, the bank said that Desoer received $1.5 million in relocation expenses for the “purchase of the new residence, including mortgage subsidy and closing costs.” Desoer also received nearly $1.1 million to pay taxes on the benefits that she received.
