Asset management CEOs see pay jump, according to new research
Compensation for executives at asset management firms such as BlackRock, Invesco, Schroders and others has jumped recently, making it hard for them to press for lower executive pay packages at the companies in which they invest, according to research by the Financial Times.
Analysis of annual reports and proxy filings of 10 leading asset management firms shows many double-digit percentage pay increases in 2013, with raises of as much as 71 percent, according to FT Fund Management, or FTfm.
BlackRock chief executive officer Larry Fink, the highest paid executive at the 10 firms analyzed, received a 12 percent pay rise last year, bringing his total compensation to $24 mn, including salary, bonuses and share awards. His pay compares with the median of $8 mn to $10 mn at S&P 500 companies.
Michael Dobson at Schroders received a 71 percent pay increase, upping his pay to $14 mn in 2013, FTfm says. Meanwhile, Martin Flanagan at Invesco took home $15 mn after a 20 percent compensation rise and Aberdeen Asset Management chief executive Martin Gilbert’s total compensation rose 7 percent to $8.6 mn.
Jeanne Branthover, managing partner at executive search firm Boyden, told the newspaper that increasing compensation at asset management firms comes amid rising competition among hedge funds, private equity firms, boutique asset management companies and others for skilled executives. She said CEO pay in the fund management industry, including at private firms, increased by about 15 percent last year to between $18 mn and $20 mn.
Industry insiders and observers say sharp increases in compensation for senior executives will make it harder for these firms to press for a reining in of executive pay at the companies they invest in.
‘It is difficult for many public asset management institutions to try to impose standards on their invested companies that they are not meeting themselves,’ the head of corporate governance at a large privately owned funds house ‒ who requested anonymity ‒ told the FT. ‘Morally and ethically I think it is correct we should observe the standards we expect of others.’
