After leading two of the most prominent financial advice companies through the tumult caused by COVID-19 last year, the chief executives of LPL Financial Holding Inc. and Ameriprise Financial Inc. were rewarded with cuts to their total 2020 compensation, just as share prices for both firms have hit new highs.
Dan Arnold, CEO and president of LPL Financial, received total compensation in 2020 of close to $7.3 million, compared to $7.7 million in 2019, for a decrease of 5.2%, according to LPL Financial's proxy filing Monday.
Meanwhile, James Cracchiolo, chairman and CEO of Ameriprise Financial, received total compensation in 2020 of $20.8 million, compared to $24.5 million in 2019, a decrease of 15.1%, according to the company's proxy statement, which it filed on Friday.
LPL Financial and Ameriprise Financial are two of the largest brokerage platforms for registered reps and financial advisers, with 17,287 and 10,000 advisers, respectively.
Total compensation includes base salary, stock awards, incentive pay and other forms of remuneration.
While the share prices of many financial services company were flattened a year ago during the broad stock market sell-off in the face of the public health crisis caused by the pandemic, both LPL and Ameriprise shares have rebounded strongly.
In early afternoon trading Tuesday, LPL shares were trading above $140, after hitting a low of $32.01 on March 22, 2020. Ameriprise shares were trading above $225 early Tuesday afternoon, compared to $80.01 a year ago.
But neither executive's recent pay package was directly linked to stock market performance, according to the proxy statements.
The executive compensation committee at LPL heavily weighs adjusted EBITDA — earnings before interest, taxes, depreciation and amortization — when funding the bonus pool. And the company fell short of that metric in 2020, according to the proxy statement.
"The decrease in gross profit and increase in investments in 2020 resulted in adjusted EBITDA of $946 million, a decrease of 12% year-over-year and below the company’s 2020 performance target for purposes of the annual bonus plan," according to the filing.
Ameriprise has been steadily scaling back Cracchiolo's compensation for the past few years, in an attempt to be "responsive to shareholder feedback in prior years," according to the Ameriprise filing. "Of note was the company’s strong financial and business performance in 2020 despite unprecedented challenges in the external environment."
Firms continue their quest to attract and retain the best advisor teams.
A survey from TacticalMind AI found 69% of advisors say a high-quality AI platform that makes investment recommendations and constructs portfolios is worth $500 monthly, while research-only tools are valued closer to $250.
The alts tech provider's latest integration lets advisors query fund data and surface portfolio insights without leaving their primary workspace.
The regulator is scrutinizing how some firms oversee concentrated positions in complex "worst-of" notes – and wants answers.
Meanwhile, Carson Group fully integrates a decades-old practice in Phoenix, Arizona, and Triad Wealth touts its 5x growth to hit a $2 billion milestone.
As technical expertise becomes increasingly commoditized, advisors who can integrate strategy, relationships, and specialized expertise into a cohesive client experience will define the next era of wealth management
Growth may get the headlines, but in my experience, longevity is earned through structure, culture, and discipline
