Updated from 2:56 p.m. ESTBank of America ( BAC - Get Report) will defer year-end bonuses paid to employees in its capital markets and investment banking units, according to a report by the Financial Times. Employees that were to receive bonuses of more than $50,000 will not get a year-end bonus for 2008. Instead, those employees will receive the deferred payments in one-third increments in 2010, 2011 and 2012, according to the Financial Times report, citing unnamed executives familiar with the situation. Bank of America told the paper that the story was "not entirely accurate," but did not elaborate. "We traditionally don't comment on our compensation plans, particularly in advance of sharing details with our associates," the bank said in a statement, the Financial Times reported. Bonuses have been a hot-button issue at BofA following its Jan. 1 purchase of Merrill Lynch. Merrill paid bonuses to its employees in December, ahead of the deal. Bank of America has said it had no authority over Merrill's ability to pay the bonuses because it was still a separate company in December. Reports on CNBC suggested former Merrill CEO John Thain insisted on paying the bonuses even after learning that the company's fourth-quarter loss would total more than $15 billion. The BofA-Merrill merger was nearly scrapped on Merrill's weak quarter, but went through as the government provided BofA with $20 billion in equity capital and agreed to backstop $118 billion in Merrill assets. Wall Street observers have questioned the wisdom of paying out bonuses when Merrill was in such straits.
Merrill's large loss and Thain's ouster have led to speculation on Wall Street that BofA's board may fire Lewis or separate his roles as chairman and CEO. BofA also on Wednesday said three Merrill Lynch directors would join its own board. Former IRS Commissioner Charles O. Rossotti, former Miller Brewing Co. executive Virgis Colbert and former Ambassador to the People's Republic of China Admiral Joseph Prueher will join BofA's board, the company said in a press release.