CEO Pay Jumped in ’21 at Broker-Dealers, but Rank-and-File Pay Lagged

Top-level executives at the eight largest publicly traded broker-dealers took home a median of $21.3 million in total compensation last year, up 14.9% over 2020 totals, according to Securities and Exchange Commission proxy filings.

Meanwhile, median salaries for employees rose by just 4.2%, to $106,148. That bump was not big enough to surmount last year's 7% inflation rate, resulting in an effective haircut for many staff.

The boon for executives, who typically benefit from big bonus plans, stock awards, and other perks beyond salary, stemmed largely from market performance in 2021.The vast majority of executive compensation packages are performance-based, tied to equity positions.

Executive compensation was up in 2021, not only because it followed a year of economic slowdown but also because it preceded a period of expected recession, said Brett Herand, principal at executive compensation consultancy Pearl Meyer. Because of this volatility, base salary may make up a slightly larger portion of executive compensation packages over the next couple years, but these deals will still predominately be driven by stock-based incentives, he said.

“Companies are looking to ensure that compensation is delivered within variables that management can influence and drive in effect,” said Herand. “With what's going on with the equity markets these days, executives don't necessarily have a lot of control over what happens to their stock price on a day-to-day basis.”