GMP Capital Inc.'s chief executive officer saw a sizeable bump in compensation, in a year the independent brokerage pared its losses, and laid off a significant portion of its work force.
Harris Fricker earned $3.9-million in 2016, compared with $3.1-million in 2015 – a 24 per cent increase, according to a regulatory filing released last week.
For the first time since becoming CEO in 2010, Mr. Fricker earned a portion of his compensation from the investment banking bonus pool, which reflected his own contributions to bringing in revenue. GMP said the change in the structure of Mr. Fricker's compensation to include payments from the pool "reflects current practice among several CEOs" in its peer group.
Mr. Fricker made $675,000 in salary, a $2.5-million bonus, and $700,000 from the bonus pool.
Doug Bell, vice-chairman, investment banking with GMP, was the second-highest earner among the executive team, making $3.7-million in 2016, with the lion's share coming from the bonus pool. In a number of previous years, Mr. Bell had routinely been GMP's top earner.
In 2016, GMP reported a net loss of $11.6-million, compared with a net loss of $30.1-million in 2015. The firm turned in a strong fourth quarter, reporting a profit of $3.2-million. Revenue last year dipped to $196-million versus/FROM $221.7-million, due to lower investment banking fees.
Last year, GMP embarked on a dramatic cost-cutting effort to address a severe downturn in the industry. A restructuring announced in January, 2016, saw the firm lay off around one-quarter of its staff, and shutter operations in Britain and Australia. The Toronto-based brokerage made further job cuts after it bought FirstEnergy Capital Corp. last summer. GMP paid $99-million for the Calgary-based boutique, which it hopes will reinvigorate its oil patch practice.
GMP, like many dealers, is seeing a much stronger start to the year in comparison to early 2016, when the underwriting market was all but dead. GMP ended the first quarter of 2017 in 8th place in the equity underwriting league tables, according to data from Thomson Reuters, behind Raymond James, but ahead of fellow independent Canacccord Genuity Group Inc.
For years before becoming CEO in 2010, Mr. Harris worked as an investment banker at GMP and specialized in the steel sector. He brought in $11.7-million in banking fees in 2016. Generally about 40 per cent of GMP's investment banking and trading revenue is funneled into the the bonus pool.
The brokerage is hosting its annual meeting on April 27 in Calgary.