Raymond James Slashes CEO Pay 17% in Turbulent Year
Raymond James Financial has slashed pay for its top executives, including a 17% pay cut for its chief executive, in light of a decline in net income and pandemic-related economic uncertainty, according to the company’s annual proxy statement released on Friday.
The St. Petersburg, Fla.-based company cut pay for its 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.
“In light of these shortfalls, and the continued high degree of economic uncertainty associated with the ongoing COVID-19 pandemic, the Committee determined to significantly reduce annual bonuses paid to certain of our NEOs from fiscal 2019 levels,” the company wrote.
Raymond James’ executive vice president of finance, Jeffrey P. Julien, received a 45% pay cut to $2.0 million from almost $3.7 million in 2019. James E. Bunn, president of Global Equities and Investment Banking, earned 12.2% less at $4.4 million, according to the proxy. Bella Loykhter Allaire, executive vice president of technology and operations, received a 10.5% pay cut to $3.12 million.
The reductions follow a round of cost cuts in April that included laying off more than 500 employees in September in light of the pandemic slowdown.
Raymond James’ board, however, praised Reilly, 66, for his “resilient leadership” through the Covid-19 pandemic, including “strong expense management through a company-wide program to reduce non-interest expenses.”
The company, which drew 69% of its annual revenue in fiscal 2020 and 63% of its net income from its wealth business, also credited Reilly with “continued successful financial advisor recruiting and retention.”
Raymond James grew its sales force 3%, or a net 228, to 8,239. The total includes 4,835 independent contractors and 3,404 employee brokers.
The company told its branch-based brokers last year that their compensation would be largely unchanged in the 2021 fiscal year. Reilly warned in December, however, that advisor recruiting could become more challenging as its rivals were stepping up the competition.
“Although we continue to experience solid interest from prospective financial advisors across all of our affiliation options, the recruiting environment has become increasingly competitive,” Reilly said in the update.
Scott A. Curtis, who is president of the Private Client Group and who appeared for the first time last year on Raymond James’ executives compensation table with $3.3 million of fiscal 2019 compensation, was not one of six named executives for 2020.
The regulatory filing also reported compensation for related employees of named executives, including Matthew Frey, a son-in-law of Reilly, who is an independent broker at Raymond James and who earned $1,283,422 prior to paying office expenses, payroll and other costs of branch operations and splitting earnings with his partner.
Raymond James, which said that Reilly’s annual total compensation to the median of the annual total compensation of all employees was 131 to 1, will hold a vote on its pay plans at its virtual-only annual meeting scheduled for February 18.