Bank of America’s gift to former MBNA CEO…

March 2, 2009

Late Friday, Bank of America (BAC) filed its 10K and while there were lots of interesting things in the filing, the thing that jumped out at me was this agreement with former MBNA CEO Bruce Hammonds.

Hammonds, whose retirement from Bank of America was announced in December, received $6.8 million from BofA in January, according to the agreement. He joined Bank of America following the $35 billion merger two years ago.

But here’s where it starts to get really interesting. While Friday’s agreement is described as a replacement for a retention agreement that Hammonds signed back on Sept. 6, 2005, a scan of filings for both BofA and MBNA doesn’t turn up the agreement. There is a mention of Hammonds’ retention agreement in this S-4 that Bank of America filed on 9/19/2005, but the actual agreement appears to be MIA. In the S-4, the value of Hammonds’ agreement, which includes access to the corporate jet for 7 years post-merger, is estimated at $22.7 million. One other interesting thing about the agreement: it was dated June 19, 2008, but wasn’t included until the K filed on Friday.

Now, maybe Bank of America is getting a bargain with this new agreement. But if they are, why do they seem to be taking the extra effort to bury the details? It’s impossible to tell from Bank of America’s filings how much — if any — of that $22.7 million has already been paid. And without that, it just looks like another TARP beneficiary — and a deeply troubled one at that — giving another generous goodbye gift to another top executive.

For more details on some other TARP beneficiaries, here’s a story I did for Portfolio.

Leave a Reply