Considering its recent struggles and slumping stock, Legg Mason Inc. has reduced the pay of its Chief Executive Officer Mark Fetting and founder Raymond A. "Chip" Mason.
Fetting's compensation package totaled $4.7 million in salary, bonus, stock awards and perks in the fiscal year that ended March 31, according to a proxy filed yesterday with the Securities and Exchange Commission.
Fetting's package was worth $5 million a year ago. Fetting, previously a senior executive vice president, became CEO in January.
Legg's compensation committee cut Fetting's cash bonus to $1.9 million for the past fiscal year, compared with $3.2 million the year before.
Fetting's stock awards and option grants were valued at $936,422 and $1.48 million, respectively. Other compensation, such as retirement contributions, totaled $30,431. Fetting's base salary was $333,333.
Mason's paycheck totaled $8.1 million in the past fiscal year, down from $13.6 million a year ago. Mason's base salary was $500,000.
Mason, who is nonexecutive chairman, received a cash bonus of $2 million, representing a steep cut from $6 million the year before. His package also included stock awards worth $106,832, option grants worth $5.4 million and other compensation worth $96,145 for items including security services.
Legg directors considered company performance in determining executive incentive awards for fiscal 2008, noting that the money manager's earnings per share fell 58 percent and its stock price dropped 41 percent, according to the proxy.
Shares of Legg, which rose 4 cents to close at $48.58 yesterday, are down 33 percent so far this year.
In the past fiscal year, some of Legg's key mutual funds struggled with underperformance, while clients took their money elsewhere. Meanwhile, the company bailed out some of its money market funds because of soured mortgage-related investments.