13 giant wealth management firms paid CEOs an average of $25.8M

April 10, 2024 2:15 PM

The CEO compensation paid by the largest publicly traded firms in wealth management offers a lens into company performance, leadership transitions and, of course, eye-popping numbers.

JPMorgan Chase CEO Jamie Dimon regained the top spot he had two years ago before losing the No. 1 position occupied in 2022 by Morgan Stanley's former chief, James Gorman, according to the below ranking of 13 firms' 2023 compensation for their head executives. The 13 companies paid their CEOs an average of $25.8 million after boosting their compensation by a mean of $2.1 million, with only four firms cutting top officials' paychecks.

One-time awards to outgoing Raymond James CEO Paul Reilly as well as to Gorman's successor at Morgan Stanley at the beginning of the year, Ted Pick, along with two executives seen as his main competitors for the role, led to big gains in compensation for them. Meanwhile, UBS CEO Sergio Ermotti took home the lowest pay of the group after returning in April to the position he held between 2011 and 2020.

Among financial advisors, such figures get "scrutinized and looked at a lot more on the wirehouse side" than at independent firms providing payouts of 85% or higher that leave them "in most cases feeling like the economics are pretty fair for what the firm is doing for them," said Jodie Papike, CEO of Cross-Search Advisor Placement Services. In times of "really down markets," the eight-figure compensation for CEOs may prompt advisors to say "wait a minute, we're all struggling here, what is going on?" — especially at wirehouses, she said.

"An advisor is thinking about their compensation as it relates to their affiliation with that firm," Papike said in an interview. "They may stop and think, 'Gosh, are the economics fair, and what should they be for how much work I'm putting into this?' In the independent world, I really don't hear that being much of a consideration."

Morgan Stanley and Raymond James gave a great deal of consideration in the form of large awards to Reilly, Pick and Morgan Stanley co-presidents Andy Saperstein and Daniel Simkowitz. The latter three executives each got a "one-time staking award" that carried "a grant value of $20 million and shareholder-aligned features," according to the firm's proxy statement.

"The staking awards support leadership continuity and will incentivize continued outstanding performance of the team during the transition period," the statement said.

At Raymond James, Reilly received a "special one-time equity retention award" valued at $15 million in recognition of how the company "delivered record results and further enhanced its capabilities to serve the most sophisticated financial needs of its advisors and their clients" over his 12-year tenure, the firm's proxy statement said.

"The committee determined that granting this special one-time equity retention award was in the best interests of the company and its shareholders and that the amount and terms of the award described herein were appropriate," it said.

For a look at the CEO pay last year at 13 of the largest firms in wealth management, scroll down the slideshow. To see what the biggest firms paid their head executives in 2022, click here. And for a look at their 2021 compensation, follow this link.

Note: Each of the firms shared executive pay in their 2024 proxy statements or 2023 annual reports. Total compensation in standardized tables required by the Securities and Exchange Commission for a company's named executive officers may vary from a firm's "direct compensation" to its CEO or other measures disclosed in annual documents.

UBS

CEO: Sergio Ermotti
2023 total compensation: $14,125,000*
2022: $13,113,755 (paid to former CEO Ralph Hamers)
2023 vs. 2022: $1,011,245 (increase of 8%)

Remark: "Sergio Ermotti joined UBS on April 1, 2023 and took on accountability as Group CEO on April 5, 2023. The board recognizes Mr. Ermotti's excellent performance in a defining year in UBS's history and strong progress in delivering on integration priorities. He was instrumental in quickly stabilizing the client franchise, managing risks, and bringing operational stability to Credit Suisse after the announcement of the acquisition. He successfully led the closing of the transaction in three months, the early repayment of the public liquidity backstop and emergency liquidity assistance plus and the termination of the loss protection agreement. His vision, drive and ambition for this transaction have resulted in an ambitious integration plan. Throughout the year, Mr. Ermotti was an extremely effective ambassador internally and externally for the combined firm and the significant value we can deliver in the future for all our stakeholders."

*As a foreign company, the wirehouse's parent doesn't file annual proxy statements with the SEC that include the same information available about other publicly traded firms.

BNY Mellon

CEO: Robin Vince
2023 total compensation: $16,801,167
2022: $11,203,469
2023 vs. 2022: $5,597,698 (increase of 50%)

Other notable executive compensation: Catherine Keating, senior executive vice president and global head of wealth management ($6,416,937)

Median annual total compensation of all employees (other than CEO): $80,501
CEO pay ratio: 209 to 1

Remark: "Beginning with the 2023 performance year, the [Human Resources and Compensation] Committee made two changes to support a more holistic approach to determining incentive compensation for our [named executive officers]. First, the corporate component is now determined by evaluating a range of financial metrics (weighted 70%) as well as non-financial goals (weighted 30%). Previously, the corporate component was determined solely by the company's operating earnings per share results. This new approach was adopted to provide the HRC Committee with a more comprehensive view of corporate performance against a variety of quantitative and qualitative measures. Second, and given this more holistic approach for evaluating the corporate component, the HRC Committee determined to apply the corporate component for all elements of incentive compensation (previously, the corporate component was not applied to determine the [performance share unit] grant value, which was determined solely by the individual modifier). The HRC Committee adopted this change to better align with peer and industry practice and to help ensure that corporate performance is comprehensively embedded in compensation outcomes which further aligns NEO compensation with the performance of the company as a whole."

LPL Financial

CEO: Dan Arnold
2023 total compensation: $16,937,790
2022: $13,750,390
2023 vs. 2022: $3,187,400 (increase of 23%)

Other notable executive compensation: Richard "Rich" Steinmeier, managing director and division president of business strategy and growth ($3,729,366)

Median annual total compensation of all employees (other than CEO): $86,430
CEO pay ratio: 196 to 1

Remark: "The Compensation Committee determined that the company's performance for 2023 met or exceeded each of the 2023 corporate goals, other than relative total shareholder return results. As a result, the 2023 bonus pool was funded above the target level and the annual cash bonus awards to our employees were generally paid at target level, or above target level for high performing employees, including our [named executive officers]. This approach is consistent with the Compensation Committee's philosophy and past practice."

Charles Schwab

CEO: Walter "Walt" Bettinger II
2023 total compensation: $23,871,744
2022: $24,386,329
2023 vs. 2022: -$514,585 (decrease of 2%)

Other notable executive compensation: Charles Schwab, co-chairman ($7,515,730)

Median annual total compensation of all employees (other than CEO): $117,672
CEO pay ratio: 203 to 1

Remark: "The Compensation Committee believes that incorporating three elements into the executive compensation program enables the recruitment and retention of talented executives and provides them incentive to act in the best interests of the company and its stockholders. The executive compensation program favors variable, performance-based opportunities as opposed to fixed base pay in alignment with a pay for performance philosophy. Both short-term incentive opportunities and long-term incentive opportunities are included in the program to ensure there is an appropriate balance of risk and reward. Further, the Compensation Committee chooses incentive plan measures for their ability to work together to drive executives' focus on short-term profitability that supports the creation of value over the long term."

Edward Jones

CEO: Penny Pennington
2023 total compensation: $25,123,962
2022: $21,437,004
2023 vs. 2022: $3,686,958 (increase of 17%)

Other notable executive compensation: Kenneth Cella, Jr., general partner and head of external affairs and community engagement ($19,281,331)

Median annual total compensation of all employees (other than CEO): $94,072
CEO pay ratio: 267 to 1

Remark: "The partnership's compensation program allocates profits to general partners, including members of its [executive leadership team], primarily based upon their ownership interests in the partnership. As general partners, ELT members benefit annually from the profits of the partnership through current cash payments from short-term results and from having an opportunity to continue to share in the long-term profitability of the organization. By owning general partnership interests, ELT members are encouraged to balance short-term and long-term results of the partnership as they have a significant amount of capital at risk. Also, by sharing in any annual operating loss of the partnership, all general partners, including ELT members, have a direct incentive to manage risk and focus on the short- and long-term financial results of the partnership."

Citi

CEO: Jane Fraser
2023 total compensation: $25,458,313
2022: $22,064,065
2023 vs. 2022: $3,394,248 (increase of 13%)

Other notable executive compensation: Andy Sieg, head of wealth ($14,109,935)

Median annual total compensation of all employees (other than CEO): $70,731
CEO pay ratio: 360 to 1

Remark: "Each named executive officer's total incentive award is based on a market benchmarking process, Citi's overall achievements, and individual executive performance against applicable goals. Target compensation is aligned through a market benchmarking process, with market rates of pay adjusted to reflect each named executive officer's experience and scope of role as the starting point for incentive pay. Each named executive officer's performance is evaluated against the four pillars and is informed by metrics contained in the executive's scorecard. The Compensation Committee then considers how performance in each pillar impacts the incentive compensation amount and written narrative assessments for each of the four pillars are completed linking pay to performance. The Compensation Committee completes this assessment for our CEO and contributes to the assessments for our other executive officers."

Wells Fargo

CEO: Charles Scharf
2023 total compensation: $25,966,198
2022: $24,642,526
2023 vs. 2022: $1,323,672 (increase of 5%)

Other notable executive compensation: Barry Sommers, CEO of Wealth and Investment Management ($10,253,308)

Median annual total compensation of all employees (other than CEO): $80,012
CEO pay ratio: 325 to 1

Remark: "After reviewing the company's key financial performance measures, the [Human Resources Committee] recognized the company delivered solid performance despite industry challenges, including bank failures, and considered the notable items that occurred during 2022 and 2023 in assessing the company's underlying financial performance for the purposes of compensation decisions. The HRC also evaluated the company's key non-financial performance and recognized that the company continued to execute on its strategic priorities and made significant progress on the company's risk, regulatory, and control commitments. The HRC further acknowledged the company's continued support and investment in its customers, communities, and employees, through activities and achievements to advance the company's non-financial goals. Based on the financial and non-financial performance outcomes discussed above, the HRC assigned a company achievement level of 110% for 2023."

Goldman Sachs

CEO: David Solomon
2023 total compensation: $26,670,817
2022: $31,609,420
2023 vs. 2022: -$4,938,603 (decrease of 16%)

Median annual total compensation of all employees (other than CEO): $153,492
CEO pay ratio: 174 to 1

Remark: "Taking into account our pay-for-performance philosophy, our Compensation Committee places substantial importance on the assessment of firmwide performance when determining [named executive officer] compensation. This includes not only financial performance, but how these results are achieved, including how our most senior leaders are investing in the future of the firm and demonstrating an appropriate commitment to a strong control environment and effective financial and nonfinancial risk management practices."

Ameriprise

CEO: James "Jim" Cracchiolo
2023 total compensation: $28,378,031
2022: $22,847,623
2023 vs. 2022: $5,530,408 (increase of 24%)

Other notable executive compensation: Joseph Sweeney, president of advice and wealth management products and service delivery ($5,726,182)

Median annual total compensation of all employees (other than CEO): $133,296
CEO pay ratio: 213 to 1

Remark: "Led by Mr. Cracchiolo, our executive team delivered outstanding results while navigating a changing and uncertain environment throughout the year. The annual cash and long-term awards provided to them reflect their consistency and ability to deliver exceptional performance for our stakeholders, including our shareholders. Both the annual and long-term awards provided to Mr. Cracchiolo and other [named executive officers] were calculated (on the company's 5-point rating scale) based on results achieved and according to the pre-established metrics and target level of performance for each financial and strategic business goal. Both the annual incentive awards and long-term incentive awards are within target ranges determined by the Compensation and Benefits Committee. Mr. Cracchiolo's target incentive opportunity did not increase relative to his opportunity for the 2022 performance year. Similarly, his 2023 long-term incentive award value is unchanged year-over-year."

Bank of America

CEO: Brian Moynihan
2023 total compensation: $28,571,192
2022: $30,177,503
2023 vs. 2022: -$1,606,311 (decrease of 5%)

Median annual total compensation of all employees (other than CEO): $124,221
CEO pay ratio: 230 to 1

Remark: "Leading up to our 2023 annual meeting, two U.S. proxy advisory firms recommended — for the first time ever — that their subscribers vote 'against' our 'Say on Pay' proposal. We believe these recommendations contributed significantly to the lower support received in 2023, as some of our institutional investors follow the voting recommendations of these firms and some others are influenced by their analyses and recommendations. In total, of the approximately 5.7 billion votes cast at the meeting, 69.1% favored our 'Say on Pay' proposal. In light of the result of our 2023 'Say on Pay' vote, which differed significantly from our prior history, and in order to ascertain the reasons for the decline, we intentionally refocused our 2023 and early 2024 shareholder engagements more directly on our executive compensation program and disclosures than in prior years."

Morgan Stanley

CEO: James Gorman
2023 total compensation: $32,951,606*
2022: $39,398,905
2023 vs. 2022: -$6,447,299 (decrease of 16%)

Other notable executive compensation: Edward "Ted" Pick, co-president and head of institutional securities and co-head of corporate strategy in 2023 who became CEO of the firm in January as Gorman's successor ($44,059,955); Andrew "Andy" Saperstein, co-president and head of wealth management who also became head of investment management in January ($40,908,000)*

Median annual total compensation of all employees (other than CEO): $136,515
CEO pay ratio: 241 to 1

Remark: In consultation with its independent compensation consultant, Semler Brossy, the [Compensation, Management Development and Succession Committee] approved a one-time staking Award to each of Messrs. Pick, Saperstein and Co-President Daniel Simkowitz in connection with the CEO succession and leadership transition process. The CMDS Committee believes it was important to stake these three leaders as a team and, after deliberation over multiple meetings, chose to grant the same amount, mix and structure for each executive to reinforce the message of collaboration in leadership through the transition. This is in line with the historical management and compensation philosophy of the firm that has allowed the firm to successfully promote from within. This management and compensation philosophy will allow the firm to make senior management transitions without disrupting the positive momentum achieved over the years in evolving the firm's strategy and creating long-term shareholder value."

*In October, Morgan Stanley announced that Gorman would step down at the beginning of 2024 after 14 years atop the megabank. Morgan Stanley further reorganized its wealth management unit in January.

Raymond James

CEO: Paul Reilly
2023 total compensation: $34,912,956
2022: $17,626,494
2023 vs. 2022: $17,286,462 (increase of 98%)

Other notable executive compensation: Scott Curtis, president of the Private Client Group ($10,392,332); Tashtego "Tash" Elwyn, president and CEO of Raymond James & Associates ($10,227,888); Paul Shoukry, chief financial officer and president who will become CEO when Paul Reilly steps down next year ($6,669,600)

Median annual total compensation of all employees (other than CEO): $126,100
CEO pay ratio: 277 to 1

Remark: "In November 2023, our chair and chief executive officer, Mr. Reilly, evaluated the performance of the company and the individual performance of each executive officer, including the [named executive officers], against previously determined individual goals. Mr. Reilly made recommendations to the committee as to the amounts of annual bonus and retention [restricted stock units] to be awarded each executive officer (other than himself). The committee reviewed and discussed such recommendations, as well as market data provided by its compensation consultant. The committee evaluated the performance of Mr. Reilly and each of our other NEOs in light of all the above information. It then reviewed such information with the other non-executive directors, who engaged with the committee in a thorough evaluation of the performance of Mr. Reilly and our other NEOs."

JPMorgan Chase

CEO: James "Jamie" Dimon
2023 total compensation: $35,093,780
2022: $34,848,606
2023 vs. 2022: $245,174 (increase of less than 1%)

Other notable executive compensation: Mary Callahan Erdoes, CEO of firm's Asset and Wealth Management division ($26,134,183)

Median annual total compensation of all employees (other than CEO): $95,988
CEO pay ratio: 366 to 1

Remark: "In determining Mr. Dimon's compensation, independent members of the board considered his exemplary leadership and achievements across the firm's four broad performance dimensions. The board continues to recognize that the firm is in a uniquely fortunate position to be led by such a highly talented and experienced executive."