Meet money management marketers' Magnificent Seven:
* John H. Seiter, executive vice president, Capital Guardian Trust Co., Los Angeles.
* Michael Del Priore, managing director of institutional sales, J.&W. Seligman & Co. Inc., New York.
* Thomas J. Lucey, senior managing director and chief of institutional management, Putnam Investments, Boston.
* Frank P.L. Minard, managing director, head of global marketing and client service, Morgan Stanley Asset Management, New York.
* Gary Fencik, managing director, Brinson Partners, Chicago.
* George Tydings, executive vice president, director of marketing, Loomis, Sayles & Co. LP, Boston.
These seven marketers were cited, repeatedly, by their peers and headhunters as the industry's top earners.
They travel constantly, staying in the best places, golfing on the finest courses and dining on the choicest cuisine.
But their real perk is the rich compensation -- as much as $2 million to $4 million -- they receive for their efforts, industry experts say.
Pensions & Investments compiled the list of top-paid marketing executives by interviewing numerous executive recruiters, marketing professionals and industry consultants. Some on the list have moved up the ranks to join management as department heads, but they still can be classified as marketers because they attend some client meetings -- even if only those where the marketing team is making its final pitch to close a deal.
Those marketers who were interviewed agreed there is plenty of money to be made in their business, but insisted their pay isn't as high as observers say.
Capital Guardian's Mr. Seiter agreed there is a lot of money to be made in top marketing jobs, but said the estimate putting his annual compensation package between $2 million and $4 million is "on the high side."
He is a stockholder in his firm, but said he doesn't view his stock as current income, valuing it instead as more of a long-term asset.
"Anyone earning close to a million doing this is doing well; $3 million is rarified," Mr. Seiter said.
Fidelity's Mr. Reynolds declined to comment on whether his total compensation package runs between $2 million and $4 million, except to say many observers overstate the amounts in compensation packages.
Each investment management firm develops its own formula for compensating key people.
Private companies tend to be secretive about how they calculate pay packages, say those in the know. At small boutique firms, for example, the head of marketing might also be the chief executive officer, whose compensation could include a hefty equity stake in the company. He or she also might receive a generous commission on top of a base salary.
Commissions on revenue generated by these marketing executives and equity partnerships are the key components of the high salaries, said one headhunter. Schedules of payouts vary tremendously, he said. Some marketers get payouts for life, while at other shops, they stop after three or four years, unless the marketer is providing client service, too.
EQUITY STAKE IS KEY
The big question mark in calculating the compensation game is the value of an executive's equity stake, a headhunter said.
"That has gotten more difficult to value in recent months, given the fluctuation in share price. Look at T. Rowe Price (Associates), where the executives are very well compensated. But a lot of their compensation comes from the company stock. In recent months, that stock was down 50%, which would really hurt their income."
Recently the stock has been trading in the high 30s, down 14% from its 52-week high of 427/8; it closed Thursday at 361/8. This headhunter said he has seen packages for national sales managers that have ranged from $500,000 to $5 million, when equity stakes were computed at the top of the market.
Average base pay for marketing executives in 1997 ranged between $149,000 to $300,000, according to a survey by Investment Counseling Inc., West Conshohocken, Pa. But most of the leading marketers earn their real wealth from stock options, partnership stakes and generous commission arrangements. And a few, when wooed to new firms, reportedly have been able to negotiate guaranteed bonuses that run as high as $1 million to $2 million.
Some marketing executives who were awarded ownership stakes in their companies lucked out when the companies were sold. In one case, Don W. Ceglar, managing director at Weiss Peck & Greer LLC, New York, reportedly received a check for $8 million just a year after joining the firm, when it was sold to Robeco Groep of the Netherlands last May.
Mr. Ceglar said that as an owner, he did receive a check, which is typical when an asset manager has been purchased for cash. He added that $8 million is "a meaningfully inflated" number, but declined to say how much he did receive.
LURING TOP PRODUCERS
Ownership stakes have been used more often in recent years to lure top producers, a Callan Associates survey conducted in 1997 based on 1996 data found. Whereas 16% of the firms surveyed offered stock options in 1994, by 1996 the number had jumped to 30%, according to the survey. And average compensation for the firms' senior marketing executives climbed 26% between 1995 and 1996.
Investment Counseling's survey, based on 1997 information, found that while the leading marketing executives still were receiving healthy commissions based on the revenue they brought into the firms, commissions were lower than in 1996. In 1997, the payout on revenue generated by an account in the first year averaged 18.9%, down from 20% in 1996; in the second year, average payout was 11.7%, vs. 13% in 1996; in the third year, it was 7.3% vs. 9%; and the amount received in perpetuity slid to 4.5%, compared with 7% in 1996.
Some headhunters and marketing professionals say the business has a big downside, because of the constant travel and entertaining required.
"It's a very demanding job, but these sales professionals become extremely valuable to a firm because of the relationships they build and the knowledge they accumulate," said one headhunter.
SMALL PRICE TO PAY
But Fidelity's Mr. Reynolds countered that the frequent travel is a small price to pay for the contribution he gets to make to the firm's business. He used to travel three to four days a week when he was strictly in the marketing business. Now as head of Fidelity's retirement business, he travels two to three days a week, visiting clients and other Fidelity sites.
He likes the fact that marketers get immediate feedback from their clients.
"It's a good business for people who like winning, since most of these jobs are commission-based. Some people can't stand that arrangement. Others thrive on it," Mr. Reynolds said.
Although marketing positions automatically offer a slew of fringe benefits, the main one is money, emphasized several marketers.
"You get to play golf at nice places. Often your company pays for your country club membership at home. Frequently you can bring your wife with you when you're going to an interesting destination. Many people get free cars. Unlimited car service is a given. In terms of entertainment, you can take clients anywhere they want to go. While outsiders see all this as perks, to marketers it's just part of the business," said one senior marketer who has been at it for over a decade.
After awhile, it can get tiring to go out for cocktails and dinner every night and then play golf the next day.
A female marketing executive expressed another view. "It's very hard work and can take three to four years to build a career. You're on the road anywhere from 50% to 70% to 80% of your time. But on the upside, you have the fun of being with interesting people. Most of the clients and consultants I got to know were very smart. It can be a wonderful career," she said.
One veteran marketer confessed he's reached the point where he's happy to have a simple cheeseburger or pizza instead of all the gourmet meals served up by the restaurants where he entertains clients.
But many in the business relish the golf that goes with the job, he said. Just about every investment conference includes a golf tournament, so people get to golf at the nicest places.
"But to me, the only real perk is the money and travel, if you like to travel," he said.
WHAT THEY SELL
How well a marketer does also depends a lot on the products an investment company has to offer, and how they perform. Equities, for example, have been the outperformers for the past few years.
"In general, there is more to be made selling equities than fixed income," said one executive recruiter. "You get around 20 basis points selling fixed-income products, compared with something like 80 basis points for emerging markets."
Capital Guardian's Mr. Seiter believes marketers selling international equities this year can still wind up doing well -- if they have sound products. He has been in the business since 1970, starting as a portfolio manager.
"They pay me to have fun. On the downside, the divorce rate is high, and many people who do it (marketing) may not be that good at it," he said.
Ann Deluce, senior vice president at Callan Associates, San Francisco, noted her firm's survey, which looked at 70 firms with assets ranging from less than $250 million to more than $10 billion, found the average total compensation of senior marketing executives in 1996 ranged from a low of $78,000 to a high of $1.2 million. Those totals did not include equity stakes or stock options, however.
The Investment Counseling survey, which covered 106 companies with assets from $500 million to $300 billion, found that executives in the top percentile received a total compensation package including equity distribution ranging from $100,000 to more than $1.3 million.
Some marketing executives in the survey earned more, but due to confidentiality agreements with Investment Counseling, their compensation could not be revealed, said Kathryn Steele, director.