Compensation for the president and CEO of TD Ameritrade stayed near $6 million last year as the online brokerage performed well in a challenging market, according to documents the company filed Thursday with the Securities and Exchange Commission.
The Omaha-based company said Fred Tomczyk and other top executives deserved generous compensation because it reported net new client assets of $41.5 billion while generating solid earnings of $1.11 per share.
"Management was rewarded in fiscal year 2011 for successfully executing on the company's business strategy, which, in the face of extremely difficult operating conditions, resulted in record net new assets," the board said.
Tomczyk's total compensation grew slightly to $5.98 million from $5.97 million in 2010. Stock awards worth $3.56 million and a $1.9 million cash incentive accounted for most of his compensation in fiscal 2011. His salary was $500,000. His other compensation, including an income tax reimbursement and transportation and security, was worth $27,612, the company said.
In 2010, Tomczyk received stock worth $3.2 million and stock options worth $1.1 million on the dates they were granted. Tomczyk did not receive stock options in 2011.
Tomczyk has said he expects the economic environment to remain difficult through 2012. The current low interest rates limit the amount of money Ameritrade can generate on asset-based fees it charges clients.
In fiscal 2011, TD Ameritrade generated $637.8 million net income, which was 8 percent better than the previous year's $592.2 million.
The company is predicting it will earn between $1 and $1.35 per share for fiscal 2012.
The Associated Press formula calculates an executive's total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.
The value that a company assigned to an executive's stock and option awards for 2011 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company's stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.
At Ameritrade's shareholder meeting in Omaha on Feb. 14, shareholders will have a chance to question Tomczyk and vote on the election of four directors.
Shareholders also can voice their approval or disapproval for Ameritrade's executive compensation policies in a non-binding advisory vote.
TD Ameritrade Holding Corp.: http://www.amtd.com
Securities and Exchange Commission: http://www.sec.gov