A report today in The New York Post reveals that bailed-out Bank of America (NYSE: BAC) is still doling out millions in bonuses to attract and retain top banking talent. Bank of America is catching heat over the bonus payouts, since it hasn't yet received federal clearance to repay its $45 billion in TARP loans.
Bank of America allegedly shelled out $15 million over two years to keep Fares Noujaim, an alumnus of both Bear Stearns and Merrill Lynch, who now serves as the company's vice chairman of investment banking. Harry McMahon is named as another banker who's been enticed to stay with handsome bonuses.
However, Bank of America is denying the claims. "Any reference to [a] specific associate's compensation in this story is inaccurate," spokeswoman Jessica Oppenheim told the Post. She added that the bank is simply "taking the steps necessary to retain key talent in response to competitive pressures."
In case you hadn't noticed, rich pay packages at struggling banks have been quite the point of contention amid the sector-wide bailout. Outspoken Rep. Barney Frank has previously compared banking bonuses with bribes, citing them as further evidence of the out-of-control greed that sparked the global financial crisis. If CEO Kenneth Lewis wants to avoid any further interrogations on Capitol Hill, Bank of America might be wise to distance itself from this story as quickly as possible.
BAC is also in a tight spot on the charts, with the stock currently sandwiched between support at its 10-week moving average and resistance from its 10-month trendline. During the short term, overhead pressure on the shares will likely be exacerbated by heavy overhead call open interest -- the June 13 strike carries a whopping 199,635 out-of-the-money calls, which could exert options-related resistance through Friday's expiration.
Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.
Happy holidays! Google giving away free Wi-Fi 
Dr. Doom Nouriel Roubini believes the bubble is about to burst
Cramer on BloggingStocks: Investors are rethinking their snap judgments 
Reader Comments (Page 1 of 1)
6-18-2009 @ 2:38PM
bob schick said...
you're selling the company short, aren't you?
kill the bellwhether/kill the market, right?
time you ran for public office
6-18-2009 @ 3:09PM
gomarfitz said...
What about Barney Frank's pension plan and medical plan. Maybee SS would be fixed if these clowns were on SS. Apparently, they fuss over private industry to divert attention from the raises they grant themselves.
6-18-2009 @ 5:16PM
al coholic said...
Barney and his cohorts in Congress know all about bribes. Virtually every every time they meet with special interest groups they take one.