Money manager CEOs take a slight pay cut in 2015

Total compensation among the CEOs of large publicly traded money management firms fell an average of 2% in 2015, a year marked by market volatility and growth — or lack thereof — in operating income.

BlackRock Inc. Chairman and CEO Laurence D. Fink once again tops the list of the highest-paid executives among 13 publicly traded money management firms that have so far disclosed 2015 compensation information, having earned $26 million last year.

Although an analysis of proxy statements by Pensions & Investments shows that Mr. Fink's compensation went up by 9% from 2014, BlackRock's own accounting measure showed his total compensation to be flat from the year before.

Mr. Fink's package included a $900,000 base salary, an $8.72 million cash bonus and deferred equity of $4.095 million. The remaining $12.285 million was a long-term incentive award.

Mr. Fink's cash bonus in 2015 was 4.4% lower than the previous year.

Lloyd C. Blankfein, chairman and CEO of Goldman Sachs Group Inc., is the second highest paid, at $23 million. Mr. Blankfein's pay decreased 4.2% from the previous year.

Of the 12 remaining proxy statements collected from other money managers, six CEOs received increases in pay from 2014, while the other six saw year-over-year declines.

Todd Sirras, a managing director at compensation consulting firm Semler Brossy Consulting Group LLC, Los Angeles, told Pensions & Investments in a phone interview that overall executive pay was flat for the CEOs of large money management firms.

“So everyone said, "the markets aren't so great, so pay wasn't so great.' There's no crisis and there's no exuberance; it was a flat year,” said Mr. Sirras. “The market ended up flat, so pay ended up flat.”

Ultimately, since there wasn't a lot of growth in the operating income for a number of large public managers last year, there was generally very little growth in CEO pay.

Mr. Sirras added that moving into 2016, the economy should be on track for growth. He just hopes “that the rubber bands and tape don't fall off the airplane that we've got going.”

Jeffrey Levi, a partner at Darien, Conn.-based money management consultant Casey, Quirk & Associates LLC, described the story of money manager CEO compensation in 2015 vs. 2014 as “a highly bifurcated” one. “A number of managers experienced declining revenue,” Mr. Levi said. “But there were also a number of firms that saw growth.”

Money managers that struggled with earnings — “which were many,” Mr. Levi said — saw “material contraction in CEO compensation,” while the firms that did well saw growth in CEO compensation.

So, firms that have been able to stay competitive and up to date in the industry were the ones that saw growth in business and also in executive compensation, Mr. Levi explained.

P&I's proxy statement analysis covered 13 publicly traded firms with major money management operations that had filed proxy statements through April 8: BlackRock, Goldman Sachs, Morgan Stanley, J.P. Morgan Asset Management, Invesco Ltd., Franklin Resources, BNY Mellon, T. Rowe Price Group Inc., Janus Capital Group Inc., Artisan Partners Asset Management Inc., Waddell & Reed Inc., Federated Investors Inc. and Calamos Asset Management Inc.

Among money management CEOs, Federated Investors' J. Christopher Donahue got the biggest raise: 9.5% to $4 million.

Federated's proxy statement shows that the company's compensation committee considered such individual factors when determining Mr. Donahue's 2015 bonus as his overall leadership of the company and his response to current and emerging regulatory issues. The committee also considered the company's operating profits.

Mary Callahan Erdoes, JPMAM's CEO, had the second-largest increase in compensation: a 9.1% hike to $18 million.

According to J.P. Morgan Chase & Co.'s proxy statement, the firm's compensation and management development committee determined that since JPMAM saw “record revenue” and “exceptional investment performance” under Ms. Erdoes' leadership, “an increase in her total compensation from $16.5 million to $18 million was appropriate.”

Meanwhile, Calamos Chairman and CEO John P. Calamos Sr. saw the biggest drop - 22% - receiving nearly $3.53 million in 2015 after receiving almost $4.53 million in 2014.

The company's proxy statement revealed that the Calamos founder's base salary in 2015 remained unchanged from 2014, at $720,000, and attributed the drop in his annual bonus to “a decline in the company's operating income and non-GAAP net income compared to 2014.” n