Bank of America gives workers $ 1 billion in shares

In a memo shared exclusively with CNN, Bank of America CEO Brian Moynihan said on Tuesday that the company is opening for the first time its share-sharing program for lower-level employees, who earn up to $ 100,000 a year. Previously, employees received a one-time cash bonus.

Bank of america (BAC) said that each eligible employee will receive between 65 and 600 limited share units, corresponding to their compensation. These units will be earned over four years from 2023 onwards.

At a minimum, this means that front-line employees such as bank cashiers will receive limited shares, which on paper are valued at around $ 2,900 based on the Bank of America’s current share price of $ 45.

In the upper end, higher paid employees would get limited shares worth about $ 27,000.

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Bank of America said the estimated value of the stock allotments is “several times higher” than the cash bonuses the bank previously distributed. Last year, Bank of America gave $ 750 cash bonuses to lower-paid employees.

Bank of America said stock rewards – which are on top of the compensation received as part of the bank’s annual audit process – amount to about 97% of its global employee base, but not to those earning more than $ 500,000 a year.

“That level of distribution is incredibly high,” said Brian Kropp, head of HR research at Gartner. “It’s rare that they push those kinds of prices out across the workforce.”

Bank of America said that only a small portion of its workforce, mostly part-time employees and workers in certain overseas locations, would receive a cash reward of a total of $ 750 apiece.

In the past, Bank of America relied more on cash bonuses for lower-paid employees. The decision to expand the pool of workers who receive limited equipment earned over time is no coincidence. Bank of America is betting that some employees do not want to stop if that means they leave thousands of dollars of stock on the table.

Companies, including banks, are struggling with high levels of labor turnover. A record 4.5 million Americans quit their jobs in November, according to government statistics.

“We are in the midst of this Great Resignation,” Kropp said. “Limited stock holdings create a long-term holding hook rather than just a cash bonus.”

Bank of America recognized that stock rewards, along with raising the wages of minimum wage workers, are designed to attract and retain talent. The bank also cited its financial results, highlighted by a record annual profit of $ 32 billion.

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