Bailed-out Bank of America has been doling out millions in bonuses in an effort to lure talent and keep investment bankers who management views as vital, sources tell The Post.
Among those who are said to have received payouts are two former Merrill Lynch bankers, Fares Noujaim, who was recently appointed as BofA’s vice chairman of investment banking, and Harry McMahon, a well-connected West Coast-based banker. Both were offered guarantees not to leave the firm.
Noujaim, a former Bear Stearns banker who joined Merrill last year, is said to have received roughly $15 million over two years.
Sources say Noujaim — a well-regarded banker focusing on the Middle East — was offered a vice-chairman role, and may have been offered at least $5 million more to stay. His earlier employment contract was nullified once Merrill merged with BofA earlier this year, sources said.
The guarantees being shelled out by the embattled bank run by CEO Ken Lewis are raising eyebrows on Wall Street because BofA has taken $45 billion in capital from the Troubled Asset Relief Program and hasn’t been allowed to refund that money.
A BofA spokeswoman argued that paying talented employees top dollar to stay is necessary because rival firms are poaching its best execs at an alarming rate.
“Competitive recruiting in investment banking and capital markets continues to be very intense and we’re taking the steps necessary to retain key talent in response to competitive pressures,” said spokeswoman Jessica Oppenheim.
She added, “Any reference to [a] specific associate’s compensation in this story is inaccurate.”
The issue of bonus payments by TARP recipients became a flash point earlier this year when Congress discovered that American International Group shelled out $454 million in retention bonuses after receiving a total of $182.5 billion in rescue cash.
Since then, Washington has clamped down on how banks in general, and TARP banks in particular, pay their employees. Last week, the Obama administration named Kenneth Feinberg its pay czar to oversee how TARP recipients pay their top 100 employees.
However, compensation is also a sore spot for banks under the government’s thumb, as they try to compete with foreign banks not subject to restraints on pay.
Meanwhile, internally, BofA’s guarantees have added to the friction that already exists between former Merrill workers and BofA employees, the latter of whom complain Merrill bankers are more often getting the guarantee bonuses.