Changes at Bank of America will impact hiring and compensation here and abroad.
CEO Brian Moynihan's said one of his highest goals is to reduce overhead even as the company tries to add to its ranks in Asia and Latin America.
That gives credence to reports Saturday that BofA's investment banking division has set aside like roughly 10 percent less for employee compensation than a year earlier as a result of sliding revenues. The investment bank's earnings were down 37 percent in 2010 from 2009, a year in which the unit booked a non-repeating $3.8 billion gain.
"It's what you should expect considering it was a pretty volatile year," compensation consultant Alan Johnson told Bloomberg. "People were down more than that at other places; I'd say a 10 percent decline overall is a pretty good outcome."
Recruiters agree. "If you're down 10 percent when the Street is down much more than that, W2-wise, you've done pretty well," says Richard Lipstein of Boyden Global Executive Search.
Clearly, BofA's not alone: Goldman Sachs and JPMorgan Chase have also announced cuts in 2010 pay for traders and other staff. But some employees may be happy to see their compensation schedules simplified with a higher level of cash bonus compensation for 2010.
Bonuses for 2010 mark the first since TARP pay restrictions were lifted. While senior investment bankers at BofA could still see the bulk of their 2010 bonuses in stock, the cash portion is expected to be a good deal higher than it was last year.
And a good thing too, says Lipstein. "Last year's compensation structure at Bank of America was so complicated that bankers actually needed spreadsheets to explain it," he says.
For more junior executives, bonuses will be comprised of up to 70 percent cash and 30 percent stock, a source told Reuters.