2010 pay steady for SRO execs; firm fees rose

Salaries for Finra executives are holding steady. Regulatory fees for broker-dealers, on the other hand, aren't. Based on pay data in the Financial Industry Regulatory Authority Inc.'s 2010 annual report, posted on the regulator's website last month, the 10 most highly paid executives are being paid about the same this year as last year. Incentive awards, which make up about half of Finra executives' pay, also are running flat. Chief executive Richard G. Ketchum is being paid $1 million per year in salary, the same amount he was paid last year. In February, he received $1.2 million in incentive pay, based on last year's results. The $2.2 million in salary and incentive pay that Mr. Ketchum will earn this year is down slightly from 2010, when he got $2.25 million. Including additional amounts for retirement and employee benefits, he received $2.6 million last year. Last year, eight of the top 10 executives at Finra earned more than $1 million in total compensation, including retirement and benefits. Meanwhile, Finra has some financial challenges this year, Mr. Ketchum wrote in the report. “Regulatory fees for 2011 — especially those driven by share volumes — continue to decline, along with a softening of other revenue sources,” he wrote. “At the same time, we continue to face expanding regulatory responsibilities and related costs.” Finra will “look for ways to stabilize declining revenues and maximize cost efficiencies to balance our cash flows,” Mr. Ketchum said. Finra spokesman Nancy Condon declined to comment further. Although regulatory fees are declining this year, they were up 10.5% in 2010, to $428.6 million. The bump-up was due to an increase last year in the fees Finra charges member firms. Fees remain below 2008 levels. Overall last year, Finra posted net income of $54.6 million, due primarily to earnings and gains on its investment portfolio, which is typical. E-mail Dan Jamieson at [email protected].