Recall that when Bank of America (NYSE: BAC) inked a deal with regulators to exit the TARP program, it agreed that it would sell assets to raise capital. Originally, it agreed to raise $4 billion, which was later reduced to $3 billion. In a recent filing the bank said that it must still raise $1.1 billion, Bloomberg notes. Even if it succeeds in selling a portion of its stake in BlackRock, it would still have a sizable gap to cover.

If Bank of America cannot close the capital gap via asset sales, it "must raise a commensurate amount of common equity" by issuing stock to employees. The stock would vest immediately.

The tax consequences are unclear right now. The bank has not yet set a ratio that would determine how much of a bonus would be in stock. But stock in general is less preferable to cash. Who wouldn't want cold cash right now, unless you are convinced that the stock has significant upside. Some employees, depending on their needs, may be willing to wait.

For more:
- here's the article

Related Articles:
Bank of America: No capital raise due to putbacks
Bank of America, PNC to sell BlackRock stakes
Bank of America wants to go slow on foreclosures?