By Eileen Ambrose, The Baltimore Sun
6:34 PM EDT, June 12, 2013
The compensation of Legg Mason Inc.'s CEO and chief financial officer more than doubled over the year that ended March 31, according to a proxy statement filed Wednesday with regulators.
CEO Joseph A. Sullivan, who took the helm of the Baltimore-based money manager in February, saw his total compensation for the fiscal year rise to $7.29 million, up from nearly $3.23 million the prior year. This includes a $425,000 salary, a $2.7 million cash bonus and $3.77 million in stock awards.
The total compensation of Chief Financial Officer Peter H. Nachtwey was $4.1 million, including a $350,000 salary, a $1.4 million cash bonus and $2 million in stock awards. Last year, his total compensation reached $1.82 million.
Jeffrey A. Nattans, executive vice president, received total compensation of $2.3 million, with about half of that from stock awards.
"The compensation committee's decision related to performance-based bonuses for the three remaining executives took into consideration a successful completion of a year of transition for our company," the company said in a statement.
Legg's annual meeting will be held at 10 a.m. Tuesday, July 23, at the company's headquarters in Harbor East, the proxy announced.
Among the fiscal year's highlights, Legg said, were the acquisition of European money manager Fauchier Partners, launching more than 20 new products that attracted more than $3 billion of investments by the end of March, and the merger of Legg Mason Capital Management in Baltimore into a Legg subsidiary in New York.
Legg has been in transition since former CEO Mark R. Fetting resigned in October under pressure, analysts said, from activist shareholder and Legg director Nelson Peltz. Fetting had led the company for nearly five years but wasn't able to stop the outflow of investor money from Legg's funds or revive the company's lagging stock price.
Sullivan stepped in as interim CEO while Legg conducted a search for Fetting's replacement. Many of the stock grants Sullivan and others received in the year were retention awards to keep them on board after Fetting left, the company said. Some departed after Sullivan became permanent CEO.
Exiting executives didn't leave empty-handed.
Fetting received about $5.76 million in compensation, including $4.1 million in stock awards. As part of his separation agreement, he will receive $2 million that will be paid out in equal installments over 15 months, so long as he doesn't compete with Legg for a year, the proxy said.
Ronald R. Dewhurst, a former senior executive vice president who had been in the running to replace Fetting, received total compensation of nearly $6.86 million. Dewhurst left Legg at the end of March, and his compensation includes $2.64 million in stock awards, $3.31 million in cash and $111,178 for unpaid vacation.
Total compensation for Thomas P. Lemke, an executive vice president who left in March, reached $3.8 million, which included a $2.1 million cash payment.
In its proxy statement, Legg said the compensation committee took into account that 85 percent of shareholders in a nonbinding vote last year gave their approval to the executives' pay. The committee concluded that shareholders liked the way it doled out compensation and didn't make major changes to the program this year, the proxy said.
Despite the transition to a new CEO, Legg is still struggling with issues that dogged Fetting.
This week, the company reported that its assets under management in May totaled $654 billion, down about $1 billion from April.
Legg's stock Wednesday closed at $32.44 a share, down 90 cents.
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