The Financial Industry Regulatory Authority had lower net revenue, net income and overall compensation expenses last year, according to the group’s most recent annual report. Still, five of its executives each collected over $1 million in total compensation and five others garnered more than $838,000 per person last year.
The regulator, a nonprofit, reported net income of $41.6 million and net revenue of $992 million in 2017 vs. net income of $57.7 million and net revenues of $1.04 million in 2016.
Compensation expenses, which represent about 70% of the group’s total expenses, fell to $672 million in 2017 from $699 million in 2016. Overall expenses declined to $992 million in 2017 from $1.037 billion in 2016.
“A reduction in incentive compensation was the primary driver for the decrease in compensation and benefits [in 2017],” the group explained in its latest annual report. These costs also declined as about 1,100 staff members moved into defined contribution retirement plans from pension plans on Jan. 1, 2017.
FINRA’s 3,500 employees conducted more than 7,800 regulatory exams last year and collected some $65 million in fines. In addition, FINRA expelled 20 firms from the industry, suspended 733 financial advisors and barred 492 brokers from work in the business.
Salaries and other compensation for FINRA’s top five executives remain at $1 million and up per year.
President and CEO Robert Cook collected a base salary of $1 million and other deferred compensation and benefits of about $450,000 last year, giving him a total package of $1.450 million in 2017. In 2018, he gave $675,000 of his 2017 incentive compensation to the FINRA Investor Education Foundation.
Todd Diganci, FINRA’s chief financial and chief administrative officer, had a base salary of $600,000 and received total compensation of $1.477 million in 2017 vs. $1.499 million in 2016.
Chief Information Officer Steven Randich had a salary of $500,000 and a full package of $1.353 million last year, while Chief Legal Officer Robert Colby had a base salary of $500,00 and total compensation of $1.193 million.
Thomas Gira, head of market regulation and transparency services, collected a salary of $450,000 and a full pay and benefits package of $1.019 million in 2017.
Five other executives had base pay of between roughly $332,000 and $375,000 and total compensation of between roughly $838,300 and $953,500.
FINRA said in the report that its compensation philosophy was based on a “pay-for-performance model that seeks to achieve pay levels in line with the competitive market while meeting the objectives of attracting, developing and retaining high-performing individuals … and to provide rewards commensurate with individual contributions and FINRA’s overall performance.”
— Check out FINRA Reveals Where Fine Money Went on ThinkAdvisor.