Bank of America plans big pay hike for investment bankers
According to Bloomberg News, Charlotte-based BofA "plans to increase some investment bankers' salaries by as much as 70 percent following the takeover of Merrill Lynch & Co., people familiar with the proposal said." This is the same bank that got $45 billion in support from the federal government.
Pay for managing directors would climb to about $300,000 from $180,000 while less senior directors would increase to $250,000 from $150,000, and vice presidents would get $200,000, up from about $125,000, according to Bloomberg.
There's a good chance that Bank of America Chief Executive Kenneth Lewis is raising the salaries simply because he does not like being told what to do. When Wall Street raised concerns about the acquisitions of Merrill Lynch and Countrywide Financial, he basically ignored them. Earlier this week, he vowed to begin repaying its federal TARP money next month because he did not like the strings that came attached with it.
Some analysts have argued that the Charlotte-based bank, which lost $2.4 billion in the fourth quarter, should be nationalized, according to the Los Angeles Times. Some critics think Lewis is full of it.
"Lewis has made some outrageous statements in the past, and his forecasts have not been that accurate," analyst Paul Miller of Friedman, Billings, Ramsey & Co. told the paper. "I think the regulators will not allow him to pay back the capital given the expected losses coming from his balance sheet."