Even a cash bonus of quadruple his salary didn't bring LPL Financial CEO Dan Arnold's compensation close to that of the CEOs of the firm's closest rivals.
Arnold, 54, earned total compensation of $7.1 million — including the cash bonus of $2.4 million — for the year, the nation’s largest independent broker-dealer
That bonus came after the company set a record in recruited client assets and
Arnold took home less than CEOs at the firm's closest rivals. Ameriprise CEO Jim Cracchiolo received $22.3 million in direct compensation, while Raymond James CEO Paul Reilly got $12.5 million.
Arnold received 135% of his target award after LPL’s compensation committee increased the bonus pool funding to $55.4 million, the proxy states. The committee cited growth in profits, recruited assets of $27.3 billion and progress “that exceeded expectations” on the firm’s long-term goal of
The committee also considered LPL’s “strategic execution, including its progress in providing new capabilities that help its financial advisors differentiate themselves in the marketplace,” the proxy states. “For example, the
The bonus pool came out as 6.2% of adjusted EBITDA in 2018, compared
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Dan Arnold received a 155% raise in his first year atop the nation’s largest independent broker-dealer.
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While the IBDs at Ameriprise (No. 2) and Raymond James (No. 3) are the closest direct rivals to LPL, both firms include employee brokerages and several other divisions outside wealth management. SEC rules about the timing of equity award valuations also made the official bottom-line total of Cracchiolo and Reilly’s compensation vary from the direct amounts.
Reilly, 64, received a cash bonus of $5.5 million — lower than a target of $8 million — on top of his $500,000 salary in fiscal 2018, the firm’s Jan. 27 proxy
Raymond James produced records in revenue at $7.3 billion and net income at $856.7 million for the fiscal year, which it counts as ending in late September each year, the document states.
“The firm’s solid performance in fiscal 2018 was driven by record annual net revenues and pre-tax income in our Private Client Group segment, Asset Management segment and Raymond James Bank,” the proxy says.
Ameriprise’s CEO pay went in a different direction in 2018. Cracchiolo, 60, sustained a 43% hit to cash pay and a 23% drop in total compensation for the year “despite strong performance on financial and business and strategic metrics,”
In a nonbinding vote last year, 75% of Ameriprise's shareholders voted
“We heard you,” the document says. “We took action.” As a result of the vote and subsequent shareholder feedback, the firm reduced its target CEO incentive by $1.8 million, eliminated the executive perquisite allowance and added more disclosures.
“While expressing strong support for management and the overall performance of the company, investors provided constructive input on executive compensation,” the document says, calling the pay policy shifts “substantial changes that have been implemented” in the previous year.
