Bank of America Corporation ( BAC - Analyst Report ) CEO Brian Moynihan becomes the latest banking executive to take a pay cut. In the regulatory filings submitted to the Securities and Exchange Commission on Friday, BofA stated that its CEO will not get any cash bonus, and his annual salary of $950,000 will remain the same.

According to the filing, BofA CEO would receive 761,007 as restricted shares, which are worth nearly $5.92 million (based on the closing price of February 15), down approximately 35% from the 2010 levels. These restricted stocks are linked to the company’s performance and some of these are payable in March 2015, at the earliest.

Of the total restricted stocks, the BofA CEO got 228,302 shares that will be vested in 12 monthly installments, starting from March 2012. These are worth $1.8 million based on the February 15 closing price. In 2010, he did not receive any bonus of this sort.

For the other part of the bonus, BofA CEO will be granted 532,705 shares, which will be eligible for payment after March 2015. These are worth $4.1 million based on the closing price of February 15. However, these restricted shares are based on the performance of the company, and the CEO is eligible to receive them only if certain financial criteria are fulfilled. Further, these restricted shares would expire in December 2016, if not earned by that time.

Back in 2010, similar performance based stocks were vested to the BofA CEO. However, the company was unable to meet the financial targets, and thereby the CEO did not receive the bonus. In 2011, the company had to face many hurdles as the overall condition of the banking sector was miserable due to various problems including slow economic growth and the Euro-zone debt crisis. These further compounded the company’s overall weak financial condition.

Over the last several quarters, BofA has been selling a number of non-core assets and unprofitable divisions to boost its capital levels and streamline operations. Further, to stabilize revenues and reduce the operating costs, the company also announced that it would trim nearly 30,000 of its workforce by 2013.

We can say that after taking all these initiatives, BofA is currently in a better position than it was a year ago. However, the company should not become complacent with this mere development and strive for further improvement in its capital base.

Getting back to the pay structure story, other BofA senior executives were also provided with bonuses, similar to that of the CEO. The co-chief operating officer (COO) of the company, Thomas Montag will get a total of $8.1 million in restricted shares, down from $14.3 million granted in 2010.

Similarly, the other co-COO, David Darnell was granted up to $4.2 million in shares depending on the performance of the company. The senior managers’ bonuses were lower than 2010 levels and performance based incentive formed the major portion of bonuses.

Amid economic slow down, many of the senior banking executives have been facing a pay slash. Apart from BofA, some other large U.S. banks such as Morgan Stanley ( MS - Analyst Report ) and Goldman Sachs Group Inc. ( GS - Analyst Report ) are also trimming the compensation of their CEOs. However, the CEO of JPMorgan Chase & Co. ( JPM - Analyst Report ) still has the benefit of a steady pay structure.

Currently, BofA retains a Zacks #3 Rank, which translates into a short-term Hold rating. Also, considering the fundamentals, we maintain a long-term Neutral recommendation on the stock.