Legg Mason Inc. Chairman Raymond A. Mason told shareholders yesterday that the company remains determined to boost its presence in money management businesses that are less cyclical than its core stock brokerage business, but even the core business is likely to add an average of five to six new offices a year.
The Baltimore-based brokerage firm had a quick, event-free annual meeting at the Stouffer Harborplace Hotel, as Mr. Mason and five colleagues were re-elected to the board of directors. Later in the day, however, the company announced a 5-for-4 stock split that effectively raises stockholders' dividends by 25 percent.
The stock split is payable Sept. 24, 1993, to shareholders of record on Sept. 8. The cash dividend stays at 10 cents a share, Legg Mason spokeswoman Geraldine Leder said, but each stockholder will now have 25 percent more shares.
The dividend boost had been called for by several stockholders at the meeting, including First of Michigan Corp. analyst Perrin Long. Legg Mason's earnings rose 43 percent in the fiscal year ending in March, and the stockholders said they should get a cut of the extra profits.
Mr. Mason said the company wants 25 percent of its revenue to come from asset management because those clients pay fees all the time, rather than paying larger fees only when they buy or sell assets.
Moving into asset management leaves Legg Mason less exposed to stock market fluctuations, Mr. Mason said, and should make its earnings more consistent. The firm now gets 15 percent of its revenue from asset management, a business in which Legg Mason manages large pools of money over time rather than concentrate on individual trades, mostly for institutional clients.
"We will not have nearly the peaks," he said. "But we should have a lot more consistency."
But Mr. Mason said it's too soon to know how much it will cost to acquire asset management companies that would help Legg Mason move closer to its goal.
The company raised $68 million through a convertible bond offering earlier this year, which Mr. Mason said was done largely to have a pool of cash available for acquisitions.
Mr. Mason said the expansion in the retail stock brokerage business isn't likely to be concentrated in the Baltimore-Washington area. He cited metropolitan Philadelphia and the Southeast as likely growth markets.