Shareholders May Be More Conservative With Bank of America Corporation's (NYSE:BAC) CEO Compensation For Now

Key Insights

• Bank of America's Annual General Meeting to take place on 22nd of April
• Total pay for CEO Brian Moynihan includes US$1.50m salary
• Total compensation is 161% above industry average
• Bank of America's EPS declined by 0.9% over the past three years while total shareholder return over the past three years was 4.0%

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Share price growth at Bank of America Corporation (NYSE:BAC) has remained rather flat over the last few years and it may be because earnings has struggled to grow at all. Some of these issues will occupy shareholders' minds as the AGM rolls around on 22nd of April. It would also be an opportunity for them to influence management through exercising their voting power on company resolutions, including CEO and executive remuneration, which could impact on firm performance in the future. From what we gathered, we think shareholders should be wary of raising CEO compensation until the company shows some marked improvement.

See our latest analysis for Bank of America

How Does Total Compensation For Brian Moynihan Compare With Other Companies In The Industry?

Our data indicates that Bank of America Corporation has a market capitalization of US$279b, and total annual CEO compensation was reported as US$29m for the year to December 2024. This means that the compensation hasn't changed much from last year. While we always look at total compensation first, our analysis shows that the salary component is less, at US$1.5m.

For comparison, other companies in the American Banks industry with market capitalizations above US$8.0b, reported a median total CEO compensation of US$11m. Hence, we can conclude that Brian Moynihan is remunerated higher than the industry median. Furthermore, Brian Moynihan directly owns US$106m worth of shares in the company, implying that they are deeply invested in the company's success.

Component	2024	2023	Proportion (2024)
Salary	US$1.5m	US$1.5m	5%
Other	US$27m	US$27m	95%
Total Compensation	US$29m	US$29m	100%

On an industry level, around 43% of total compensation represents salary and 57% is other remuneration. In Bank of America's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. It's important to note that a slant towards non-salary compensation suggests that total pay is tied to the company's performance.

A Look at Bank of America Corporation's Growth Numbers

Over the last three years, Bank of America Corporation has not seen its earnings per share change much, though they have deteriorated slightly. In the last year, its revenue is up 2.6%.

Its a bit disappointing to see that the company has failed to grow its EPS. The fairly low revenue growth fails to impress given that the EPS is down. It's hard to argue the company is firing on all cylinders, so shareholders might be averse to high CEO remuneration. Looking ahead, you might want to check this free visual report on analyst forecasts for the company's future earnings..

Has Bank of America Corporation Been A Good Investment?

With a total shareholder return of 4.0% over three years, Bank of America Corporation has done okay by shareholders, but there's always room for improvement. Accordingly, a proposal to increase CEO remuneration without seeing an improvement in shareholder returns might not be met favorably by most shareholders.

In Summary...

The flat share price growth combined with the the fact that earnings have failed to grow makes us wonder whether the share price will have any further strong momentum. In the upcoming AGM, shareholders will get the opportunity to discuss any concerns with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

If you think CEO compensation levels are interesting you will probably really like this free visualization of insider trading at Bank of America.

Important note: Bank of America is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.