Why it was better to be BoA's CEO than Citigroup's

Bank of America awarded Chief Executive Officer Brian T Moynihan $20 million for his work last year, raising his compensation 25 per cent, while Citigroup cut CEO Mike Corbat’s by 6.1 per cent to $15.5 million.

Moynihan received $18.5 million in stock grants for 2016, according to a regulatory filing Friday, up from the $14.5 million he received for 2015. He hasn’t received a cash bonus since 2007. Corbat’s pay included a $4.2 million cash award and $9.8 million in shares that pay out over years based on performance. Both executives received salaries of $1.5 million.

Moynihan, 57, has worked to boost the lender’s profitability through cost reductions and by resolving legal matters left over from the financial crisis. The bank increased profit by 13 per cent to $17.9 billion in 2016, and Moynihan said in April he’d cap expenses at $53 billion by the end of 2018, a $2 billion drop from last year.

Despite dialling back costs, Moynihan didn’t achieve his long-term 60 per cent efficiency ratio target in 2016. Bank of America, the second largest US lender, ended the year with a 65 per cent ratio of non-interest expense to net income, an improvement from 69 per cent in 2015. The firm also hasn’t achieved its 12 per cent target for return on tangible common equity, which remained below 10 per cent at the end of last year.

Bank of America shares climbed 31 per cent in 2016, the most among the largest US deposit-taking lenders — largely due to a fourth-quarter rally in financial stocks fuelled by investor expectations that Donald Trump’s election would result in less regulation and lower taxes.