B of A Makes Moynihan Hold Stock Longer Under New Pay Plan: Report

Bank of America (BAC) will prevent Chief Executive Brian Moynihan from completely cashing out of its stock for a year after his retirement, according to a news report.

The company's new compensation policy is designed to better align the interests of executives and stockholders, according to an article Reuters published on Monday, based on correspondence between B of A and the Securities and Exchange Commission. Shareholders, led by activist investor John Chevedden, had sought the change.

Under the previous policy, Moynihan had to hold at least 500,000 shares and at least 50% of future share awards until his retirement, and now he has to retain the same stake for one year longer. The new policy also requires other executives to hold at least 300,000 shares and 50% of their future awards until their retirement. Previously, they had no required holding period.

B of A has posted a note on the changes on its website. It is expected to file a proxy statement detailing the new policy shortly.

Moynihan made $12.1 million in 2012, more than 90% of which was stock awards, Reuters reported.

Other lenders are overhauling compensation policies. This month Citigroup (C) announced a new pay policy, in response to investor pressure, that establishes specific performance benchmarks for executives and delays a portion of their annual bonuses for three years.