In his first year as LPL Financial's CEO, Dan Arnold's compensation soars

He earned $7.4 million, up from $2.9 million in 2016 and 37% more than his predecessor, Mark Casady, made in his final year

Mar 29, 2018 @ 2:51 pm

By Mark Schoeff Jr.

In his first year as LPL Financial's CEO, Dan Arnold earned $7.4 million, substantially more than the $5.4 million his predecessor earned in his last year in that position, according to the firm's proxy statement filed with the Securities and Exchange Commission on Thursday.

In 2016, Mr. Arnold made $2.9 million serving as LPL's president. He took on the additonal title of CEO in January 2017, when former LPL CEO Mark Casady retired. Mr. Casaday served as LPL's CEO for 13 years, during which time the company went public.

The LPL board increased Mr. Arnold's pay in part to reflect his added duties. It increased his annual base salary to about $800,000, up from approximately $667,000 as president. He also received a one-time seven-figure bonus.

"In recognition of the substantial additional responsibilities that Mr. Arnold assumed and his expected contributions to the company, and to reinforce Mr. Arnold's alignment with to shareholders' interests, the board granted Mr. Arnold a one-time incentive award consisting of time-based restricted stock units having a grant date fair value of $1.5 million," the proxy statement said.

The board based its decision on Mr. Arnold's compensation on the pay of similar executives in the industry as well as its assessment of his "role, experience and tenure" at LPL, according to the proxy.

Over the last year, Mr. Arnold has guided LPL while it absorbs National Plan Holdings, a four broker-dealer network that represents LPL's biggest acquisition. LPL is the largest independent broker-dealer in the nation, with 15,210 financial advisers.

LPL's performance likely contributed to Mr. Arnold's payday.

The proxy statement indicates that over the last year, LPL's total assets grew to $615 billion, a 21% increase, while its gross profit climbed to $1.6 billion, a 12% increase over the previous year. LPL's earnings before interest, taxes, depreciation and amortization as well as its earnings-per-share increased last year by 21% and 22%, respectively.

And during Mr. Arnold's tenure, LPL's stock price has climbed 52%.

"The company reported good business and financial results in 2017, and further positioned itself to better serve and support its advisors, drive profitable growth and create long-term shareholder value," the proxy states.

The results led the board to fund the bonus pool for top executives at "above-target levels."

Mr. Arnold joined LPL in 2007 and has worked his way up through the ranks. He was a managing director, then chief financial officer from 2012-15 before being named president in 2015.

The Dodd-Frank financial reform law requires companies to compare their CEO's pay to that of the average employee. The median total compensation of LPL's W-2 employees is $78,170, meaning that Mr. Arnold's pay ratio is 95 times that of the average LPL worker.


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