Current, Former FINRA Execs Receive Millions in Compensation

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WASHINGTON — Former FINRA vice chairman Stephen Luparello received $5.34 million of total compensation in 2012 — the highest of any of the individuals in The Bond Buyer's annual survey of the compensation levels at 21 industry, self-regulatory, state and local, and muni related groups.

Where the Money Goes Table

The survey is based on the latest annual Form 990s the groups file to the Internal Revenue Service that detail their finances and the compensation of most of their executives and top staff officials.

FINRA enforces municipal securities rules and it pays millions of dollars to current and former top officials. The total take for Luparello, who left FINRA after 16 years on Oct. 7, 2012 of that year to join the law firm of WilmerHale, included a base salary of $463,890, bonus and incentive compensation of $690,000 and other compensation of almost $4.13 million, in addition to $31,309 of deferred compensation and $23,766 of nontaxable benefits. Luparello was named director of the Securities and Exchange Commission's trading and markets division in February of this year, where his salary as a senior officer will be capped at $243,400.

The total compensation amounts for Luparello and other departing officials were so high because they included lump sum distributions from retirement plans, said Nancy Condon, FINRA vice president of media relations & web services. Total compensation amounts include base compensation, bonus and incentive compensation and deferred compensation, as well as nontaxable benefits, according to the From 990s.

Former FINRA executive vice president of corporate communications and government relations Howard Schloss, who left FINRA in September 2012 after 12 years there and at its predecessor organization NASD, and former general counsel and EVP Marc Menchel who left in June 2012 after 10 years, received total compensation of $3.70 million and $3.25 million, respectively.

Stephen Joachim, FINRA's current executive vice president for transparency services who has been with the self-regulator since January 2002, received $3.17 million of total compensation for 2012.

FINRA chairman and chief executive officer Richard Ketchum received a total take of almost $2.63 million for 2012, $540,000 less than the $3.17 million he received in 2011. His base salary, at $978,164 in 2012, was $1,698 less than the $979,862 he received the previous year.

The total compensation levels in the survey ranged from the $5.34 million for Luparello in 2012 to $171,568 in 2013 for Albany-based Mackin & Casey, which serves as executive director for the Association of Financial Guaranty Insurers, Inc. That range does not include the $93,155 received in 2013 by Lisa Good, executive director of the National Federation of Municipal Analysts, because she works part time.

The base compensation levels ranged from $2.51 million for Tim Ryan, former president and chief executive officer of the Securities Industry and Financial Markets Association, to $171,568 for Mackin & Casey.

While SIFMA's latest Form 990 was for the fiscal year ending Oct. 31, 2013 it showed compensation levels for Ryan and others for calendar year 2012, according to Katrina Cavalli, the group's managing director, public affairs. Ryan left SIFMA in February 2013. In May of that year, SIFMA promoted Ken Bentsen to president after he had served as executive vice president of public policy and advocacy, and hired former Sen. Judd Gregg as its CEO. But before the end of that year, Gregg stepped down from his post and Bentsen was appointed president and CEO. Ryan's total compensation was almost $2.79 million for 2012. Bentsen received total and base compensation of $1.22 million and $790,577, respectively that year.


To be fair, the 21 groups' fiscal years, as well as their timeliness in filing the forms, differ considerably.  Bond Dealers of America has the most current data, having filed a Form 990 for its fiscal year ending Feb. 28, 2014. At the other end of the spectrum, five groups' latest forms were for the 2012 calendar year: FINRA; the National Association of Bond Lawyers, the Council of Infrastructure Financing Authorities, and the American Public Power Association.  NABL's form is the same as was reported last year. It filed for an extension for its Form 990 for 2013, which will not be available until November, according to its staff.

The total compensation and base salaries of the executive and top staff officials of virtually all of the groups, even the state and local ones, exceeded the $167,000 salary that Securities and Exchange Commission chairman Mary Jo White is slated to receive this year.

As is the case every year, the salaries of the officials of industry and self-regulatory groups far exceeded those of the top wage earners from state and local groups.

The top officials and board members of the self-regulators also get some perks. The perks of Ketchum and other FINRA executives and employees, described in microscopic print in the self-regulator's Form 990 for 2012, include booking the "next cabin above economy" for seats to and from Canada, Mexico, and other countries for direct flights that are more than four hours long. Board members get reimbursed for first class travel expenses to and from FINRA-related board or corporate meetings.

Ketchum also gets $20,000 per calendar year for admission fees, dues, and house charges to one club each in New York City and Washington, car services in those two cities and New York state, and up to $20,000 per year for personal finance and tax counseling as well as spousal travel for certain business-related events.

FINRA board members were paid a total of $1.21 million, with most serving in 2012 and 2013 but one serving in 2011 and another just in 2012. Board members get base compensation of $50,000, with the highest amount going to John Brennan, at $87,936 for 2012.

Frank Keating, American Bankers Association president and CEO, and Peter Ruane, secretary of the American Road and Transportation Builders Association, had higher base salaries in 2012 than Ketchum, at $1.33 million and $1.06 million, respectively. Their total compensation was $1.96 million and $1.25 million, respectively.

Lynnette Kelly, executive director of the Municipal Securities Rulemaking Board, the other self-regulator in the survey, which writes muni rules, received total compensation of $1.12 million, with a base salary of $652,455, for the fiscal year ending Sept. 30, 2013.

MSRB board members received a total of almost $1.42 million, of which $1.10 million was for those serving in 2012 and $319,719 for those serving in 2012, according to the board's Form 990. The base salary is $50,000, but is increased for extra duties. The board's From 990 reported Alan Polsky, the board's chair from Oct. 1, 2011 to Sept. 30, 2012, made $80,300, compared to $50,300 for Jay Goldstone, the current chair that year.  The executive director and board members are reimbursed for coach for trips of three hours or less and for coach or business class for trips of more than three hours. They are permitted reimbursement for first class travel for the longer trips if only two classes are available.

Bond Dealers of America CEO Mike Nicholas had total and base compensation of $435,148 and $400,243, respectively for 2013, according to BDA's Form 990.


Among the state and local groups, Jeffrey Esser, the executive director and CEO of the Government Finance Officers Association had the highest total and base compensation at $450,184 and $368,795, respectively, in the group's Form 990 for the fiscal year ending March 31, 2013. Susan Gaffney, who left GFOA as director of its federal liaison center in late 2012, to become a consultant for the group, received total and base compensation of $203,226 and $170,345, respectively.

Donald Borut, who served as the National League of Cities' executive director until the end of 2012, was next with total and base compensation of $385,706 and $344,971, respectively, according to the group's Form 990 for the fiscal year ending Sept. 30, 2012. Clarence Anthony, a former mayor of South Bay, Fla., and National League of Cities president, replaced Borut last year.

Matthew Chase, executive director of the National Association of Counties since September 2012 received total and base compensation of $391,640 and $303,508, respectively, according to NACo's Form 990 for 2013. Dan Crippen, executive director and CEO for the National Governors Association, had total and base compensation of $337,610 and $297,651, respectively in the group's Form 990 for the fiscal year ending June 30, 2013.

Among the other groups, Mark Crisson, who retired from the American Public Power Association as president and CEO in April of this year $763,868 in total compensation in 2012. His base salary was $501,967. He was replaced by Sue Kelly.

John Horsley, who retired from the American Association of State Highway and Transportation Officials in February 2013, received $661,567 in total compensation and had a base salary of $632,992, according to the Form 990 the group filed for the fiscal year ending June 30, 2013. Horsley was replaced by Frederick "Bud" Wright.

The National Council of State Housing Finance Agencies' executive director, Barbara Thompson, received total and base compensation of $586,042 and $481,533, respectively.

David Vaudt, chairman of the Governmental Accounting Standards board was on the low end of the totem pole at the Financial Accounting Foundation in 2013, receiving total and base compensation of $375,120 and $269,705. That compares to $960,725 and $756,459 for Russell Golden, chairman of the Financial Accounting Standards Board and $702,319 and $498,800 for Teresa Polley, chairman of FAF.

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