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Rating:The Most Underpaid Fundster CEO Is Not Who You Think Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, April 23, 2015

The Most Underpaid Fundster CEO Is Not Who You Think

News summary by MFWire's editors

Given the pervasive coverage this week of Larry Fink's $23.9-million 2014 payday, you could be forgiven for thinking that the BlackRock [profile] chief is grossly overpaid. Indeed, a trade publication's new poll has 70 percent of fundsters agreeing that top executives' pay is out of whack in the industry. Yet if you compare CEO pay to profits or assets under management, the story looks very different ... and very varied.

MFWire dug through the most-recent available (2014 in many cases, but 2013 or fiscal 2014 in some) CEO compensation data from proxy filings and the like filed by 19 publicly-traded mutual fund shops who collectively managed a little more than $10 trillion in AUM. MFWire then pulled in the shops' AUM and net income figures (corresponding to the compensation period in question), and compared those figures to the compensation figures. The results are in the table below.

To sum up the table, yes, Fink's compensation ($23.9 million) is higher than that for most of the other CEOs on the list, save Mario Gabelli ($85 million in 2013) of Gamco [profile]. Yet when you translate CEO compensation into a percentage of the firm's net income, Fink is actually the second-most underpaid CEO on the list, behind only Greg Johnson of Franklin Templeton [profile].

If you're still thinking that Fink or any of the others on this list earns too much, remember this: in November, Bloomberg reported that Bill Gross (since departed to Janus) earned a $290-million bonus from Pimco in 2013. That's more than the $243.8 million that these 19 CEOs earned combined.

On the other hand, retail pays a lot less. Wal-Mart CEO Doug McMillon earned $26 million last year, while the retail giant earned $16 billion. That pay level translates into 0.163 percent of Wal-mart's net income, a rate 4.44 times lower than Fink.

CEO Compensation For Publicly Traded Mutual Fund Firms
Stock Symbol CEO (Fund Firm) Total CEO Comp ($MM) Net Income(Loss) ($MM) CEO comp as a % of net income
APAM Eric Colson (Artisan Partners) 6.68 69.6 9.6
AB Peter Kraus (AllianceBernstein) 6.79 186 3.65
AMG Sean Healey (Affiliated Managers Group) 1 20 361 5.55
BLK Larry Fink (BlackRock) 23.9 3,290 0.724
CLMS John Calamos (Calamos) 3.93 13.6 29
CNS Robert Steers (Cohen & Steers) 3 75.5 3.97
EV Tom Faust (Eaton Vance) 2 11.2 321 3.5
FII Chris Donahue (Federated) 3.66 149 2.45
BEN Greg Johnson (Franklin Templeton) 2 15.8 2,380 0.663
GBL Mario Gabelli (Gamco) 1 85 117 72.5
HNNA Neil Hennessy (Hennessy) 2 2.44 7.7 31.7
IVZ Martin Flanagan (Invesco) 16 1,090 1.46
JNS Dick Weil (Janus) 8.15 155 5.24
LM Joe Sullivan (Legg Mason) 2 9.5 285 3.34
MN Patrick Cunningham (Manning & Napier) 1, 3 6.04 2.66 227
TROW Jamie Kennedy (T. Rowe Price) 8.9 1,200 0.742
GROW Frank Holmes (U.S. Global Investors) 2 0.765 -0.96 NA
VRTS George Aylward (Virtus) 7.06 97 7.28
WETF Jonathan Steinberg (WisdomTree) 1 4.97 51.5 9.64
Total 243.8 9,851 2.5
Mean 12.8 23.2
Median 7.1 4.6
Source: All based on proxy filings and annual reports for calendar year 2014 filed with the SEC, except 1where 2013 data or 2fiscal 2014 data was the most recent available.


Bloomberg, InvestmentNews, and the Wall Street Journal were some of the publications that highlighted Fink's pay.

3A note on Manning and Napier's numbers: Manning reports two different net income figures, which lead to dramatically different estimations CEO-comp-as-a-percentage-of-net-income. In the table above, MFWire used Manning's 2013 "net income ... attributable to Manning & Napier, Inc." of $2.656 million, which translates its CEO's compensation into 227 percent of net income. Yet Manning also reports "Net income (loss) attributable to controlling and noncontrolling interests", $76.941 million for 2013, and that translates its CEO comp into 7.85 percent of net income. 

Edited by: Neil Anderson, Managing Editor


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