STOCK MARKET WATCH -- Thursday, 20 December 2012

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19. BofA’s Moynihan Said to Kill Proposal to Cut Pay for Brokers

http://www.bloomberg.com/news/2012-12-20/bofa-s-moynihan-said-to-kill-proposal-to-cut-payouts-for-brokers.html

Bank of America Corp. Chief Executive Officer Brian T. Moynihan blocked a proposal to cut the main component of most brokers’ pay for 2013, said a person with direct knowledge of the matter.

The plan would have reduced the so-called grid payout for Merrill Lynch financial advisers by two percentage points, the person said, requesting anonymity because it wasn’t made public. The changes, which would have affected advisers generating less than $1 million in commissions, were seen as a way to cushion the costs of new bonuses, the person said.

Bank of America, the second-biggest U.S. lender, proceeded with introducing the new awards for advisers who steer clients to use more of the bank’s products. In the month before that incentive was unveiled internally last week, Moynihan decided to overrule John Thiel, head of the Merrill Lynch brokerage, and prevent changes to the grid, the person said.

“If any one firm steps significantly out of the pack, and two percentage points is significant, that becomes a deal- killer,” said Mindy Diamond, president of Diamond Consultants LLC, a Chester, New Jersey-based executive-search firm.