After a report concerning questionable executive compensation payouts an investigation on behalf of current long term investors in Bank of America Corporation (NYSE:BAC) over potential breaches of fiduciary duty related to the historical and potential compensation that was awarded certain senior officers and executives of Bank of America Corp. was announced.

Kenneth R. Feinberg, the Obama administrations special master for executive compensation, reviewed over the past five months compensations paid to the 25 highest earners of 419 banks between October 2008, when the first US Troubled Asset Relief Program funds were dispensed, and February 2009, when the stimulus bill took effect. Kenneth Feinberg said he immediately excluded most of the 419 companies from his examination because they said they didn't pay any executives more than $500,000, but he wound up citing 17 banks for making troublesome payments. 11 of the 17 banks making troublesome payments have already repaid the government for money they borrowed under TARP.

Mr. Feinberg determined that banks paid out $1.6 billion in unwarranted bonuses, retention awards, stock grants and 'golden parachute' retirement packages to their top earners at the height of the financial crisis.

Bank of America Corporation, the bank and financial holding company located in Charlotte, NC, is among the 17 companies. Bank of America has already come under fire for allowing Merrill Lynch & Co. to dole out $3.6 billion in bonuses, even as it was struggling with mounting losses, shortly after Bank of America agreed to buy it. Another of the other 16 companies was Citigroup, which was reportedly identified for having the most egregious compensation packages, according to government officials with knowledge of Mr. Feinbergs report. Citigroup reportedly handed out several hundred million dollars in pay in 2008 as it neared collapse. Nearly two-thirds of the payouts amount to Andrew J. Hall, owner of a nearly 1000 year old German Medieval Castle, who reportedly received a payout of more than $100 million in connection with spin-off of Citigroups Phibro energy trading unit for $370 million to Occidental Petroleum in 2009.

In most cases the banks told Feinberg that they were obligated by employment contracts to pay the bonuses and other compensation, but Kenneth R. Feinberg said to reporters that those 17 companies exercised 'poor judgment' for making the $1.6 billion in 'ill-advised payments' to their top paid employees shortly after accepting TARP funds from the federal government. 'They shouldn't have made these payments,'' Feinberg told reporters. 'They were ill-advised. They were troublesome.'

According to the investigation by a law firm the investigation on behalf of current long term investors in Bank of America Corporation (NYSE:BAC) stock focuses, among other things, on possible shareholder claims that certain of Bank of Americas senior officers were unjustly enriched through their receipt of unwarranted, excessive or unearned compensation in past years. Certain senior officers and executives at Bank of America Corporation (BAC) were awarded salaries, bonuses, stock options and other forms of long-term, incentive or retirement compensation that were, so the investigation, excessive or unwarranted based on the Bank of Americas performance as compared to what senior officers at comparable companies were making and/or results that were fraudulent, misleading or not long-lasting.

Former CEO of Bank of America, Kenneth D. Lewis, who earned a 5-year total compensation of $147.50million, earned in 2007a total compensation of $20,404,009, in 2008, he earned a total compensation of $9,003,467. On September 30th, 2009 Bank of America confirmed that Ken Lewis would be retiring by the end of the year. Since January 01, 2010 Brian Moynihan has been promoted to President and CEO of Bank of America. In 2009 Brian Moynihan earned a total compensation of $6.5million. Bank of America received TARP Funding of $45 billion, including $10 billion allocated to Merrill Lynch.

The investigation by the law firm focuses on claims that the prior compensation awarded at Bank of America Corporation is now clearly improper based upon its current operating condition.

Bank of America Corporation reported a Net income of $14.982billion in 2007 and a declined Net Income of $6.276billion in 2009. Shares of Bank of America Corporation (BAC) fell from $54 per share in 2007 to under $7 in 2009, but eventually recovered to over $19 in April 2010. BAC shares recently traded at $13.77 per share.

Finally and most importantly the investigation focuses also on possible claims that would allow Bank of America Corporation (BAC) stockholders to influence or control future compensation decisions at Bank of America Corporation.

Within the industry huge amounts have been allocated for payout and bonus. Goldman Sachs is reportedly paying out an average of $544,000 per worker, though many could earn several times that amount, JP Morgan Chase on average pays about $400,000, and Morgan Stanley pays about $262,000. Morgan Stanley reportedly put aside $8.3 billion for pay and benefits during the first half of 2010, 44% more than during the same period last year. Goldman Sachs put aside $3.8 billion for pay and benefits in the second quarter equivalent to 43% of total quarterly revenue in addition to $5.5 billion in the first three months.