Bank of America (BAC) is issuing $1 billion of restricted stock to its employees following the lender’s strong fourth-quarter 2024 financial results.
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To retain senior level employees, Bank of America, the second-largest lender in the U.S., is awarding stock bonuses on top of staff’s regular compensation. The stock awards will be provided to employees who earn as much as $500,000 in total annual pay, according to a memo from CEO Brian Moynihan.
Bank of America says that 97% of its global workforce is eligible to participate in the stock awards. This is the eighth time that the commercial bank has paid its workforce stock awards. Since the bonus program began in 2017, the lender has paid out a total of $5.8 billion worth of stock awards.
Strong Financial Results
The latest stock awards come after Bank of America reported strong financial results for the fourth quarter and all of last year. The lender announced $27.1 billion of 2024 net income, up 2.3% from the previous year. “It was another strong year for our company as we continued to drive growth and deliver for our clients,” said Moynihan in the memo to staff.
Bank of America says it remains focused on increasing its revenue while also investing for future success, spending money on people and technology. The lender isn’t the only Wall Street bank doling out rewards to workers. The biggest U.S. banks have raised pay packages to retain top talent, giving them more stock awards or cash bonuses.
On January 17, Goldman Sachs (GS) announced that it was giving CEO David Solomon and President John Waldron $80 million of stock awards each to remain at the investment bank an additional five years. Last autumn, Bank of America raised its minimum wage to $25 an hour starting this year. BAC stock has gained 47% over the past 12 months.
Is BAC Stock a Buy?
The stock of Bank of America has a consensus Strong Buy rating among 19 Wall Street analysts. That rating is based on 17 Buy and two Hold recommendations assigned in the last three months. The average BAC price target of $52.94 implies 13.78% upside from current levels.
