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State Street CEO Awarded 12% Pay Hike on Good Performance

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According to the company’s proxy filing last Thursday, State Street Corporation’s (STT - Free Report) Chief Executive Officer, Joseph Jay Hooley, has been awarded with an annual salary of $13.5 million, based on the company’s good performance in 2016. This represents a raise of 12% from his pay package in 2015.

The total pay package includes $1 million base salary with $2.6 million cash bonus and $9 million stock-based incentive. We note that the firm did not pay any bonus to Hooley twice, once in 2008 (when he was not the CEO) during the financial crisis period and the second time in 2015 – owing to the company’s poor financial performance and legal troubles.

The pay raise can be attributed to improved financials. Net profits in 2016 increased 6.5% from 2015 to $2 billion. However, revenues decreased 1.5% from 2015 to $10.2 billion. Moreover its return on equity increased to 10.5% from 9.8% in 2015.  

Per the company’s filing, the CEO has been awarded the bonus based on his efforts related to the digital upgrade of the company’s data and analytics arm, improvement of data quality, acquisition of General Electric’s asset management arm, dividend distribution and share repurchases during the year.

Along with the CEO, some of the top executives of the company have also received higher compensation for their performance in 2016.

Looking at its price performance, shares of State Street Corporation gained 12.1% over the last six months, underperforming 25.7% gain for the Zacks categorized Banks - Major Regional industry.

It carries a Zacks Rank #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



Some better-ranked stocks in the finance space include Bank of America Corporation (BAC - Free Report) , SunTrust Banks, Inc. (STI - Free Report) and Credit Suisse Group AG .  All these stocks carry a Zacks Rank #2 (Buy).

Bank of America witnessed an upward earnings estimate revision of 1.7% for the current year in the last 60 days. The company’s share price increased 78.8% in the last one year.

SunTrust Banks’ earnings estimates were revised higher by 0.5% for the current year in the last 60 days. Its share price increased nearly 53.6% in the last one year.

Credit Suisse Group AG also witnessed an upward earnings estimate revision of 3.8%. Moreover, its share price increased 4.2% in the last one year.

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