LPL Trims CEO Arnold’s Pay to $7.25 Million
LPL Financial Chief Executive Dan Arnold’s compensation slipped 5.4% in 2020 as the Covid-19 pandemic weighed on earnings, the independent broker-dealer reported Monday in its annual proxy filing.
The cut in pay came as the company’s profits for the year fell below bonus targets, although the LPL board of directors’ compensation committee touted Arnold’s leadership in delivering “strong core business results,” and shepherding employees through the uncertainties that came with the pandemic, according to the filing.
LPL’s gross profit in 2020 decreased 3% to $2.1 billion, largely due to lower short-term interest rates in response to the Covid-19 pandemic, the filing said.
All of LPL’s named executives saw pay fall in 2020, except for Richard Steinmeier, a former UBS Wealth Management USA executive who is president of LPL’s Business Development division.
Steinmeier, who joined the firm in August 2018 and is its third highest-paid executive, earned total compensation last year of $2.44 million, including a $982,000 cash bonus, the filing said. That marked a 9.9% increase from his 2019 compensation of $2.22 million, which included a $780,000 cash bonus.
In awarding Steinmeier’s cash bonus, the committee lauded his role in delivering record recruited assets for the company in 2020 and implementing strategies to expand the company’s competitiveness in multiple addressable markets.
Steinmeier oversaw LPL’s roll-out last April of Strategic Wealth Services, its “premium” channel aimed at wirehouse brokers with at least $200 million in assets that offers payouts of 60% to 80%. The firm has revamped its overall recruiting strategy under Steinmeier, and has become more aggressive with forgivable loans offered brokers to smooth their transitions.
He had received an increase in base salary to $500,000 from $450,000 in February of last year, due to his added responsibility for corporate strategy, his individual performance, as well as benchmarking data and internal equity considerations, the filing said.
The remaining named executives at LPL–Chief Financial Officer Matthew J. Audette, Chief Investment Officer Scott Seese and Chief Customer Care Officer Dayton Semerjian–saw decreases in the total values of their compensation and no changes to their base salaries, the proxy filing showed.
While Audette and Seese each saw year-over-year declines in their compensation of roughly 15%, Semerjian, who had joined LPL in February 2019, saw only a 3.85% decrease.
The compensation committee determined that Arnold, Audette, Seese and Semerjian received adequate base salaries based on the “competitiveness and mix” of each executive’s total compensation opportunity based on benchmarking data that included compensation data for comparable roles at relevant peer companies, the proxy said.
A spokeswoman for LPL did not respond to a request for comment.
At competitor Ameriprise Financial, meanwhile, Chairman and CEO James Cracchiolo received total compensation in 2020 of about $20.8 million, a 15.2% drop from $24.5 million the year before, the company reported Friday in its annual proxy statement.
Cracchiolo, 62, has had his annual total direct compensation trimmed by about 35% since 2017 in the company’s attempt to be “responsive to shareholder feedback in prior years,” the filing said.
Raymond James in its January proxy statement revealed that it cut pay for Chairman and Chief Executive Paul Reilly by almost 17% to $11.1 million from $13.4 million in 2019 after giving him an 8% raise last year.