Raymond James reduced the total direct compensation of CEO Paul Reilly and other senior executives in 2020, according to the firm’s annual proxy statement, which made note of the “difficult” second half the firm faced amid the COVID-19 pandemic and other challenges.
Reilly’s total pay was reduced by 17% to $11.1 million from $13.4 million in 2019. Although his salary remained $500,000, his incentive compensation decreased, including his cash bonus, which fell to $4.7 million from $5.9 billion.
In a cost-cutting move last year, Raymond James eliminated nearly 4% of its global workforce, which at the time stood at 13,900 worldwide — meaning about 500 positions.
“After a strong start to fiscal 2020, the second half was difficult, as we faced the COVID-19 pandemic, global economic uncertainty and social unrest across the nation,” Reilly said in the letter to shareholders included in the proxy statement.
Meanwhile, total compensation for Jeffrey Julien, executive vice president of finance, fell to $2 million from $3.7 million; for James Bunn, president of global equities and investment banking, it dropped to $4.4 million from $5 million; and for Bella Allaire, executive vice president of technology and operations, it declined to $3.1 million from $3.5 million.
Raymond James did not specify in the proxy statement why it reduced the executives’ total pay and declined to comment.
However, the firm indicated in the proxy statement that incentive pay was impacted by its 2020 results.
In November, Reilly “evaluated the performance of the company and the individual performance of each executive officer… against previously-determined individual goals.”
The company’s 2020 compensation targets were “based upon historical compensation, financial industry surveys and fiscal 2020 budget projections,” it noted.
Also, in setting those targets, the Raymond James Corporate Governance, Nominating & Compensation Committee also “stipulated that annual bonuses would be funded from a pool equal to 6% of consolidated pre-tax income, with no individual bonus to exceed 3% of such measure,” the proxy statement said.
“Overall, and despite many challenges, Raymond James was able to achieve good financial results” in fiscal 2020 that included record revenue of $8 billion, Reilly explained in the proxy. But he noted that net income declined 21%, “largely due to higher provision for loan losses and interest rate cuts.”
“We nevertheless continued our strong retention and recruiting of financial advisors, reaching records for the total number of advisors and year-end client assets,” he said.
“Moving forward, we expect to face continued headwinds in 2021 from a full year of lower short-term interest rates, and there remains a high degree of uncertainty about the course of the COVID-19 pandemic and the transition to a new U.S. administration,” he said. “However, we believe that Raymond James is well positioned for growth.”
The number of advisors in the firm’s Private Client Group increased in 2020 to a record of more than 8,200, according to the proxy statement.
Revenue in the division grew 4% to $5.6 billion but pre-tax income decreased 7% to $539 million, it said. The revenue growth was “driven by strong growth in assets in fee-based accounts” and the increased number of advisors, it noted.
Private Client Group assets under administration ended the fiscal year at a record $883.3 billion, representing 11% growth over Sept. 30, 2019.