First on CNN: Bank of America is giving workers $1 billion of stock
In a memo shared exclusively with CNN, Bank of America CEO Brian Moynihan said Tuesday the company is for the first time opening up its stock awards program to lower-level employees who make up to $100,000 a year. In the past, those employees received a one-time cash bonus.
At a minimum, that means frontline workers like bank tellers will receive restricted shares that are valued, on paper, at about $2,900 based on Bank of America’s current share price of $45.
At the upper end, higher-salary employees would get restricted shares valued at around $27,000.
Bank of America said the stock awards are going out to roughly 97% of its global employee base, but not to those who make above $500,000 a year.
“That level of distribution is incredibly high,” said Brian Kropp, head of Gartner’s human resources practice. “The fact they are pushing out that kind of award across the workforce is rare.”
Bank of America said that only a small portion of its workforce, mostly part-time employees and workers in certain overseas locations, will receive a cash award, totaling $750 apiece.
In the past, Bank of America relied more on cash bonuses for lower-compensated employees. The decision to expand the pool of workers getting restricted stock that vests over time, is no coincidence. Bank of America is betting some employees won’t want to quit if that means leaving thousands of dollars of stock on the table.
“We are in the middle of this Great Resignation,” said Kropp. “Restricted stock creates a long-term retention hook rather than just a cash bonus.”
