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

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."

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.

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