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T. Rowe Price (TROW) CEO Stromberg's 2017 Pay Hiked by 28.9%

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William J. Stromberg, chief executive officer (CEO) of T. Rowe Price Group Inc. (TROW - Free Report) , received more than 28% hike in his total compensation package in 2017. His annual salary rose to $11.7 million from $9.08 million in the previous year, according to a proxy statement filed by the company.

The CEO’s compensation for the year increased mainly due to the 25% year-over-year rise in performance-based incentives. Further, the CEO’s package consists of $350-million base salary. Also, it includes $3.55 million as stock awards, almost doubled from the prior year, and $7.6 million as cash bonus from T. Rowe’s non-equity incentive plan, up 11% year over year.

Moreover, Stromberg was also offered a one-time supplemental $39,759 cash bonus for cash dividend equivalents lost due to change in equity grant from semi-annual to annual.

The pay raise of the CEO primarily came on the back of the company’s financial performance in 2017. The company’s earnings per share increased 21% from 2016 and return on equity increased to 28% from 25% recorded in the prior year. Additionally, T. Rowe reported rise in assets under management of more than 22% to $991.1 billion in 2017, with net revenues increasing 13.5% year over year.

T. Rowe Price’s strategic initiatives, including investment in technology and advisory services, strengthening distribution platform, introduction of products, will likely stoke long-term growth. Further, it remains debt free with sufficient liquidity and is focused on raising shareholders’ confidence through steady capital-deployment activities. However, escalating expenses remain a near-term headwind.

All positive factors have caused investors to become optimistic about T. Rowe Price's long-term prospects. Notably, the company's share price appreciated roughly 39.4% in 2017, outperforming 31.1% growth registered by the industry, following a 5.3% rise in 2016.



Currently, T. Rowe carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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