Last year was not a big year for raises in America. Collectively, Americans ended the year seeing their compensation rise just 2 percent.
But bank executives are different from you and me. Case in point: Bank of America chairman and CEO Brian Moynihan. On Friday in filing, the bank said it handed Moynihan a 23 percent raise, bringing his 2015 pay to $16 million at a time when antipathy to Wall Street has become a central theme of the U.S. presidential election .
What did Moynihan do to justify his raise? Let's take a look:
- Bank of America's stock fell 5.9 percent in 2015, a worse return than the S&P 500 (down 1.3 percent) and the S&P financial index (down 3.5 percent).
- The bank was embarrassingly forced to resubmit its stress test, a process used by the Federal Reserve to evaluate how healthy banks are and approve things like dividend payment, Bloomberg points out (BofA's competitors all passed the test in one try last year).
- Moynihan survived a campaign by pension funds to strip him of his role as chairman. The pension funds, which own shares in BofA, argued that with Moynihan as both chairman and CEO, there wasn’t enough oversight of management. That argument won 37 percent of shareholders' votes, which is much more than is usually obtained in similar shareholder efforts.
- Even the bright side of Bank of America's 2015 was tainted: Net income grew almost four times to $14.4 billion in 2015 compared to 2014, but that was in large part because the bank did not pay a $16.6 billion settlement to the government for fraud in 2015 like it did in 2014.
How does Bank of America justify the increase? Who knows. It declined to comment to HuffPost beyond referring to the bank’s filing with regulators.
Dennis Kelleher, president and CEO of Better Markets, a nonprofit financial reform group, told HuffPost there really isn’t any good reason for the decision. "With its stock dropping, trading below book, recently paying out [$16.6] billion, Bank of America should not be shelling out lavish pay to an undeserving CEO," Kelleher said. Arguing the bank likely would be better managed, more stable and more profitable if it broke itself into smaller parts, he said the board's decision on Moynihan's pay was a slap in shareholders' faces. Kelleher said Moynihan's pay was an indication that "these too-big-to-fail banking conglomerates are little more than vehicles to enrich the senior executives."
"Trying to find a persuasive rationale for this kind of pay package is a fool's errand. It's just more evidence of a system run amok," said spokesman Jim Lardner of Americans For Financial Reform, a financial group that is pushing for regulators to pass rules on executive compensation as laid out in the Dodd-Frank financial reform law passed in 2010.
There's not a real trend in big bank CEOs' pay packages for 2015. Two other big bank CEOs -- Goldman Sachs' Lloyd Blankfein and Morgan Stanley's James Gorman -- were handed modest pay cuts this year, while JP Morgan CEO Jamie Dimon's pay was increased 35 percent to $27 million.
Regardless of whether Moynihan's raise was deserved, Bank of America, which by one measure is the fifth most disliked company in America, is sticking its neck out in a year when Bernie Sanders has built a presidential campaign on attacking Wall Street and inveighing against the scourge of income inequality.
And the last thing a bank should want to do is write the talking points for its harshest critics.