Monday, June 3, 2013

Bonus Watch: Bull Sees Red Over BofA Cross-Sales

From WSJ: In January, Merrill Lynch branch managers saw a new variable in the formula that determines their yearly bonus: how much money brokerage clients have in checking and savings accounts at parent Bank of America Corp.

And there was another surprise: If customers buy stocks or bonds using a bank account, the purchase counts as a "negative deposit" for the Merrill branch manager, possibly hurting the bonus. Such bonuses can range from $25,000 to $300,000 out of total pay that can exceed $1 million for some managers.

The move is one of the latest wrinkles in Bank of America Chief Executive Brian Moynihan's strategy to squeeze more revenue and profit from "cross-selling" everything from stocks to mutual funds to credit cards to mortgages.

The 53-year-old Mr. Moynihan has vowed that improvements will catapult the nation's second-largest bank in assets into a long-awaited new era of growth.  But there is resistance in the ranks at Merrill, which was on the verge of collapse in 2008 when Mr. Moynihan's predecessor, Kenneth D. Lewis Jr., swooped in to buy the New York brokerage firm, the largest in the world by client assets….

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