Bank of America may increase investment bankers' salaries

New York: Bank of America Corp plans to increase some investment bankers' salaries by as much as 70 per cent following the takeover earlier this year of Merrill Lynch & Co, people familiar with the proposal said.

"The concepts we are considering would not increase total compensation," Brian Moynihan, Bank of America's president of investment banking and wealth management, wrote Friday in a memo to employees obtained by Bloomberg News. "Rather, we believe it is responsible, and consistent with the emerging public consensus, that a greater percentage of overall compensation come from fixed base salary."

Bank of America, which has received $45 billion (Dh165 billion) of taxpayers' money, may raise the annual base pay for some managing directors to about $300,000 from $180,000, said the people, who declined to be identified because the final numbers are still under discussion. Salaries for less-senior directors would climb to about $250,000 from $150,000, and vice-presidents would get $200,000, up from about $125,000, the people said.

Bonuses will become a "smaller" portion of total compensation, Moynihan wrote in the memo. The adjustments, which may be rolled out as soon as next month, are designed in part to align the salaries of employees at Charlotte, North Carolina-based Bank of America with workers at New York-based Merrill, one person familiar with the plans said. Salaries for traders and other employees outside the investment bank may also be adjusted, the person said.

Governments across the world are gearing up to curb bankers' year-end cash bonuses after the credit crisis forced regulators and lawmakers to use taxpayer funds to rescue the industry. The US House passed a Bill a week ago that would impose a 90 per cent tax rate on bonuses paid by American International Group Inc and firms that received more than $5 billion from the government. The Senate is weighing a tax.

"In view of the public concerns about executive compensation, changes in the market... all the major financial institutions are evaluating compensation practices," Moynihan wrote in the memo. "We are considering proposals that reflect principles that have been outlined by regulators and elected officials, as well as the need to be competitive in the industry."