Does this suggest BofA Merrill is actually a great payer?
Historically, BofA didn't have a reputation for paying especially well. As an independent firm, Merrill Lynch was known for paying fairly ok, but with the exception of the $4bn bonus pool of 2008, it usually lagged Goldman and Morgan Stanley.
How is it, therefore, that BofA has paid its head of investment banking so lavishly for 2009? As was variously reported at the weekend, Tom Montag, the former Goldman banker of 22 years who joined Merrill on a reputed $50m package in 2008, is to receive $29.9m.
This puts Montag comfortably ahead of Lloyd Blankfein ($9m), Jamie Dimon ($17.6m), and ahead even of John Stumpf of Wells Fargo, who on $18.7m previously ranked as last year's highest earning Wall Street CEO.
Is BofA trying to send out a signal that it's willing and able to pay at the top of the market for good people? Maybe. Even though it doesn't break out compensation expenditure or headcount at its investment bank, someone 'close to the bank' let it be known recently that pay per head would average $400k for 2009, ahead of JP Morgan, and behind only Goldman Sachs among US firms.
Headhunters also tell us that BofA Merrill has a large cheque book for bringing on the new hires it wants in M&A, fixed income, equity derivatives and commodities this year. "They're paying big and offering generous guarantees," says one.
