Wall Street CEO pay vs. shareholder gains: Who won?

Mario Gabelli
Adam Jeffery | CNBC
Mario Gabelli

Wall Street pay and shareholder performance don't always line up.

Executive recruitment firm Charles Skorina & Co. makes the point in a new ranking of how much the CEOs of public investment managers are paid relative to the gains for owners of their stock.

Ric Dillon, for example, earned just more than $1 million in 2014 as CEO and portfolio manager of $16.4 billion mutual fund manager Diamond Hill Investment Group. That pay put him dead last on Skorina's ranking of the top 50 best-paid investment management chief executives.

But Dillon is No. 1 when the list is reranked for five-year shareholder returns; Diamond Hill investors have earned a market-beating average of 26.39 percent. That means Dillon, based in Columbus, Ohio, earned about $40,000 per 1 percentage point of annualized shareholder return.

Gamco Investors CEO Mario Gabelli, by contrast, earned $6.29 million for every percentage point of annualized shareholder return, a much lower rate of 14.08 percent and 45th out of 50 on the Skorina ranking. At the same time, Gabelli, whose New York-based firm manages about $47 billion, was one of the best-paid public company CEOs last year at $88.5 million, landing him on top of all other public investment managers.

"It's clear that all the guys are transparent," Skorina founder Charles Skorina said about how the CEOs are paid. "But shareholder value doesn't always align with the comp."

Top paid CEOs of 2014
And the top paid CEOs of 2014 are...   

A spokesman for Diamond Hill declined to comment. A spokesman for Gamco did not respond to a request.

Skorina said his intention with the ranking wasn't to pass judgment on the CEOs given numerous caveats to the ranking. That includes Gabelli and others founding their firms and owning big chunks of them—hence big pay coming from more assets under management—and the fact the CEOs often have pay tied closely to profits with negligible base salaries.

Instead, Skorina said, the list is an attempt to anticipate the results of a new reporting rule from the Dodd-Frank Act that will put executive compensation side by side with stock performance.

CEOs ranked by pay and performance

Rank
Company
CEO
Pay for perform
2014 Comp $M
2014 AUM $B
5 yr shareholder return
1 Diamond Hill CM Dillon, R. 0.04 1.04 15.7 26.39
2 WisdomTree Steinberg, J. 0.08 4.38 39.3 53.19
3 SEI Investments West, A. 0.1 1.76 253 18.38
4 Virtus Invest Partners Aylward, G. 0.11 6.51 56.7 59.6
5 Cohen & Steers Steers, R. 0.17 3.12 53.1 18.58
6 Fortress Investment Nardone, R. 0.17 2.54 67.5 14.54
7 Affiliated Mgrs Grp Healey, S. 0.22 5.37 626 24.07
8 Och-Ziff CM Och, D. 0.25 1.14 47.5 4.64
9 Raymond James Reilly, P. 0.32 6.01 66.7 19.06
10 CBRE Group Sulentic, R. 0.34 6.37 90.6 18.48
11 Brookfield AM Flatt, J. B. 0.37 6.65 200 18.03
12 Federated Investors Donahue, J. C. 0.41 3.66 362.9 9.02
13 City National Goldsmith, R. 0.41 5.02 32.7 12.38
14 Evercore Partners Altman, R. 0.41 4.85 14 11.91
15 American Capital Wilkus, M. 0.41 16.9 22 40.99
16 CIFC Corp Vaccaro, S. 0.45 6.12 14 13.7
17 Pzena IM Pzena, R. 0.46 2.37 27.7 5.12
18 Jones Lang Lasalle Dyer, C. 0.51 9.58 53.6 18.62
19 SunTrust Rogers, W. 0.63 9.19 45.54 14.7
20 Waddell & Reed Herrmann, H. 0.63 7.69 126.54 12.11
21 T Rowe Price Kennedy, J. 0.82 8.9 746.8 10.88
22 Ameriprise Financial Cracchiolo, J. 0.87 24.46 806.18 28.19
23 PNC Financial Demchak, W. 0.9 11.34 135 12.58
24 Calamos Advisors Calamos, J., Sr. 0.91 4.53 23.5 4.95
25 Principal Financial Zimpleman, L. 0.93 16.92 519.3 18.1
26 Legg Mason Sullivan, J. 0.98 11.55 709.1 11.77
27 Franklin Resources Johnson, G. 1.16 15.9 880.1 13.73
28 U.S. Bancorp Davis, R. 1.19 19.37 55 16.31
29 Charles Schwab Bettinger, W. 1.2 11.84 258.4 9.87
30 Invesco Flanagan, M. 1.28 15.62 792.4 12.23
31 Wells Fargo Stumpf, J. 1.32 21.43 496 16.25
32 BNY Mellon Hassell, G. 1.34 11.66 1700 8.69
33 Eaton Vance Faust, T. 1.41 11.25 296 8
34 Lazard AM Jacobs, K. 1.49 9.99 197 6.69
35 State Street Hooley, J. 1.51 18.84 2448 12.52
36 MetLife Kandarian, S. 1.61 15.16 473.7 9.41
37 Prudential Financial Strangfeld, J. 1.61 22.16 1176 13.73
38 Northern Trust Waddell, F. 1.91 12.44 934 6.52
39 AXA Group de Castries, H. 1.99 6.51 1545.17 3.27
40 Janus Capital Grp Weil, R. 2.01 8.15 183.1 4.05
41 BlackRock Fink, L. 2.33 23.86 4650 10.24
42 JP Morgan Chase Dimon, J. 3.21 27.7 1700 8.62
43 Blackstone Schwarzman, S. 3.52 85.89 300 24.41
44 GAMCO Investors Gabelli, M. 6.29 88.52 47.5 14.08
45 Morgan Stanley Gorman, J. 6.64 23.27 403 3.5
46 Bank of America Moynihan, B. 11.34 15.34 902.9 1.35
47 Goldman Sachs Blankfein, L. 15.12 37.48 856 2.48
48 Oppenheimer Lowenthal, A G -0.63 3.95 25.9 -6.29
49 Credit Suisse Dougan, B. -0.86 9.75 1377 -11.38
50 Stifel Financial Kruszewski, R. -1.8 6.96 19 -3.87
Source: Charles Skorina & Co. "Pay for perform" ratio indicates $ millions of CEO compensation per 1 percentage point of annualized shareholder return.


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