Bank of America Corporation has announced a proposal to amend and restate its Equity Plan, seeking to increase the number of shares available for grant by 100 million. In 2023, shareholders had approved the addition of 75 million shares for grant under the Plan, and the company awarded approximately 112.6 million. The proposed increase of 100 million shares is aimed at allowing the company to continue its current grant practices for at least one more year.
The press release also highlights that over 90% of employees throughout the enterprise received stock-based awards in 2023, with over 60 million shares granted to over 214,000 employees from 2021-2023. Additionally, over 23 million shares are set to be granted in the first quarter of 2024 through Sharing Success awards.
The company's broad use of shares has resulted in a 3-year average burn rate of 1.26%; excluding Sharing Success awards, the 3-year average burn rate is 1.01%. Furthermore, awards to the CEO and NEOs over the last three years represent only 0.48% and 1.75%, respectively, of the total awards granted across the enterprise.
Bank of America has reduced the number of common shares outstanding by over 2.88 billion shares, a reduction of approximately 26.7% since year-end 2012. During this time, around 798 million restricted shares and units have been awarded as compensation.
As of March 1, 2024, approximately 67 million shares of common stock are available for grant as equity-based awards under the BACEP. The proposed amendment and restatement, if approved, would increase the number of shares available for awards by 100 million, resulting in an estimated total of approximately 167 million shares available for future awards.
The press release also notes that the proposed amendment and restatement would have an estimated total dilutive effect of approximately 5.3%, with the incremental overhang resulting from the requested share increase equal to approximately 1.3%.
The Board has emphasized the importance of equity-based awards in aligning employee interests with those of shareholders and has recommended the amendment and restatement to increase the number of shares of common stock available for awards under the Plan by 100 million shares.
Following these announcements, the company's shares moved -0.2%, and are now trading at a price of $37.83. Check out the company's full 8-K submission here.
