When Brian Moynihan agreed to take over from Ken Lewis as the CEO of Bank of America this January 1, he didn't ask what his salary might be. Maybe it was because he was only given the job by default — after all, he was the only one who expressed interest in it, as Lewis heartily and passive-aggressively reminded him in his outgoing speech — and he didn't want to screw it up by giving them the wrong number. Or perhaps it was because he was more interested in serving his country and God and amassing raw power than accumulating money right this second. Either way: While Moynihan was unperturbed by what his salary might be, the board of directors at Bank of America faced a terrible conundrum. What to pay their CEO, at this precise moment in history? Yesterday, a full month after Moynihan assumed his post, they finally came up with a number. The Wall Street Journal gives us a little idea of some of the angst that went into the process: "Directors wanted to make sure it wasn't the highest in the banking industry," said a person familiar with the matter, but:
"Bank of America didn't want to go as low as Citigroup Inc., where CEO Vikram Pandit agreed to work for $1 in base salary until the New York bank returns to sustained profitability.
Daily Intel has obtained portions of a transcript of the discussions had by the Bank of America board.
Chairman Walter Massey: So we're looking at somewhere between $1 and infinity.
Donald Powell : I don't think we need to give him that much. I mean, he's totally psyched that we even let him have the job. If it wasn't for the financial crisis he'd be running some podunk shop in Boston.
Former Morgan Stanley exec Robert Stanley: Give him $1.50! Just to tickle Pandit's nuts a little.
Brian Moynihan : I mean, you guys. I'm on the board. I'm right here. I can hear everything you're saying.
Former BofA CEO Charles K. Gifford: [Pats his hand.] We know, Brian. CEO of Bank of America is a tough job, and the person holding it should be justly compensated. That's why when I left, I got a $16.36 million cash payment, up to an additional $8.67 million in "incentive payments," $3.1 million a year for life, $50,000 a year in consulting fees, 120 hours of free flight time a year on the company's jet, an office and a secretary, $38.4 million in company stock, and the right to buy 60 Red Sox tickets from the bank annually for the rest of my life. Oh, and if I die my wife gets $2.3 million a year. If I die. I'm looking into cryogenics.
Chairman Walter Massey: [Looks at Rolex.] Well, that's enough for today. Shall we order from the Palm?
Donald Powell : $250,000.
Robert Stanley: $250,001.
D. Paul Jones Jr. : $250,002?
Walter Massey: Anyone hungry?
Donald Powell : $650,001.
Robert Stanley: $650,002.
D. Paul Jones Jr. : $650,003?
Virgis W. Colbert: I can't take this anymore! I'M MELTING.
[Robert Scully and Donald Powell come bursting into the room. Their hair and suits are disheveled, they've clearly gained a few pounds, but their eyes are shining.]
Scully: Dude! We've got it.
Powell: Bob's wife took him to a store this weekend, like a discount store, where poor people go —
Scully: It's called Wal-something.
Scully: Anyway, they have this amazing price structure thing there, where something is $10 and they'll say it's $9.99.
Powell: Because it sounds cheaper.
Scully: So we were thinking —
Powell: We could pay Moynihan $999,999.99.
Scully: Because it sounds like less than a million.
Powell: And you know, a "million dollars" still sounds like a lot, to some people. [All laugh.]
Walter Massey: Well, that's quite an idea. But do you think it's too obvious?
Powell: Maybe we should make it $950,000. Just to have some distance.
Walter Massey: All right! Then we're done!
Scully: Man, this is really going to tickle Pandit's nuts.