Fred Tom Tomczyk, CEO of TD AmeritradeMichael Falco
TD Ameritrade shareholders are suffering, but the firm's chief executive officer is not thanks to the generosity of the discount brokerage firm's board.
TD Ameritrade said in an 8-k filing that it increased CEO Fredric Tomczyk's base salary by 40 per cent, or $200,000 (U.S.), to $700,000. The brokerage firm increased his bonus "target" by a further $100,000 to $5.6-million.
For shareholders, that's got to sting. TD Ameritrade's stock is down from a 52-week high above $22, and now trades for about $15.60. The biggest shareholder of all is Toronto-Dominion Bank .
Despite the plunge in the stock, the company has been doing well. Profits, client assets and trading activity are all up in recent periods.
Is that why Mr. Tomczyk got the raise? Good question. TD Ameritrade said only that the changes were under the terms of the company's management incentive plan.
Filings sleuths at the site Footnoted.com, who spotted the disclosure, did some digging to find out if the plan required an increase for Mr. Tomczyk.
After looking through the company's recent proxy filing, Footnoted's analysts found "it doesn't appear quite as set in stone as one might first assume" as the filing says that "The Compensation Committee has discretion to reduce or eliminate the actual award of any participant."
"Thus, in this case, it appears that the Compensation Committee is doing what it wanted to do, not what it had to do," Footnoted's analysts wrote. "Of course, Tomczyk will have an easier time getting by until the stock price recovers, thanks to the boost to his salary and bonus. But shareholders, it looks like you're on your own."