InvestmentNews: Exec pay - Less vroom at the top

InvestmentNews: Exec pay – Less vroom at the top

June 3 2013

By Andrew Osterland


“Executive pay in the industry was relatively flat last year, subject to under- or outperformance at specific companies,” said Joe Sorrentino, a managing director at compensation consultant Steven Hall Partners LLC. “Compensation has not reached pre-financial-crisis levels, but it has increased significantly from the trough in 2010.”

The pay of chief executives was up at Bank of America Corp., UBS and Wells Fargo & Co., and down at The Goldman Sachs Group Inc. and Morgan Stanley, which both paid their chief executives 18% less in total compensation last year.

At Franklin Resources, CEO Gregory Johnson’s total compensation climbed 25% to $12.32 million, largely due to a whopping stock award valued at $8.85 million.

The pay of T. Rowe Price chief executive James Kennedy increased 6.9% to $8.44 million. Brian Rogers, chairman and chief investment officer of the company, saw his pay increase 8% to $8.33 million.

Two trends that continue to play out in the industry are the increased use of performance targets for executives and a more substantial part of total compensation being paid in equity incentives, very often deferred for more than a year, Mr. Sorrentino said.

LPL chief executive Mark Casady, for example, saw his cash bonus drop by more than 50% to $1 million, but he also received $2.8 million worth of incentive options.

While financial services executives still aren’t pulling in what they did in the heady days leading up to the financial crisis, they aren’t exactly earning chump change.

“There’s still more opportunity to make a lot of money in financial services than in other industries, but less so,” Mr. Sorrentino said.

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