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Stronger wealth management earnings than in 2020 yielded higher compensation last year for the CEOs of 10 of the largest firms in the industry.
J.P. Morgan Chase CEO Jamie Dimon led the field with ease by tens of millions of dollars after the impact of a huge “one-time special award” and the continued growth of the firm’s wealth management arms, according to Financial Planning’s analysis of the companies’ 2022 proxy statements. Firms like it and rivals such as Bank of America’s Merrill, Morgan Stanley, Wells Fargo, LPL Financial, Raymond James, and Ameriprise set pay with an eye toward aligning their compensation with the firm’s results.
“The way that we as compensation consultants and our clients typically look at executive pay, we want to ensure that we are paying competitively for the CEO position to ensure that the organization is meeting its business goals and thereby driving shareholder value creation,” said Ed Steinhoff, a managing director with Pearl Meyer who works with several banks and insurance companies. “All of that has driven a very competitive market for talent.”
Base CEO salaries rose about three percent last year, with larger increases under incentive pay provisions of the executives’ compensation agreements, according to Steinhoff.
“We definitely have seen higher incentive pay for 2021 performance than we did for 2020 performance,” Steinhoff said. “In 2021, we saw a pretty nice recovery of financial and operational results as organizations figured out how to work through the pandemic, and so we saw much stronger results in 2021 than we did in 2020.”