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Bank of America Corp (BAC)’s Moynihan’s Giant Payday? Put the Pitchforks Down

It’s not often that you get a 70%-plus raise. But if you want to know what that feels like, just ask Bank of America Corp (NYSE:BAC) CEO Brian Moynihan.

As my fellow Fool John Maxfield pointed out earlier today, thanks to the latest SEC filings, we now know that Moynihan’s pay is set to eclipse $12 million. But before you start grumbling about Wall Street and its massive pay, let’s consider a few things.

Bank of America Corp (NYSE:BAC)First, the jump stems from an increase of Moynihan’s stock-based comp. Based on the 926,238 shares that he was granted, he did indeed see a raise over the 761,007 shares that he received last year. But that’s a 22% increase, which is a far cry from the 73% headline number on the CEO’s comp bump.

Where’d the rest come from? Simple, the bank’s stock price is up 55% between this year’s and last year’s grant date. So while Moynihan received more overall shares this year, most of the reason for the big jump in comp came from the big jump in B of A’s shares. That jump is in no small part due to the efforts of Moynihan — particularly in managing the bank’s legal muddle.

Shareholders tend to like the idea of share-based compensation from the perspective that it helps tie management’s compensation to a performance measure — imperfect as it is. And as long as it’s not seriously abused, share-based comp can mean that if shareholders are suffering, management is, too.

For that scheme to have any meaning though, it has to cut both ways. Most of the time, we as investors find ourselves complaining that the comp-by-shares approach isn’t working because CEOs make out like kings no matter what. In Moynihan’s case, though, he’s been laboring under a decidedly below-market pay package for years now, and with the bank in a much-improved state and the stock soaring, it should raise few hackles that he’s making more.

Well, making more on paper, at least. As in the prior year, the overwhelming bulk of Moynihan’s pay comes through shares, and the majority of those shares are “performance” stock grants — meaning that they only settle if the bank is meeting returns goals years out in the future.

Today’s scuttlebutt on Moynihan’s pay also includes the whispers that his base salary will be boosted to $1.5 million. That’s no small jump over his previous $950,000 salary, but it only brings him to parity with JPMorgan Chase & Co. (NYSE:JPM)‘s CEO Jamie Dimon and Citigroup Inc. (NYSE:C)‘s fresh-to-the-post Mike Corbat. Goldman Sachs Group, Inc. (NYSE:GS)‘s Lloyd Blankfein takes home a cool $2 million in base salary, while Wells Fargo & Company (NYSE:WFC)‘s John Stumpf sat atop the pack back in 2011 with a $2.8 million salary.