Tags: Fidelity | Internal | Payouts | Investments

Source: Fidelity Boosts Internal Payouts 29 Percent

Friday, 05 Feb 2010 02:26 PM

Fidelity Investments has raised the value of shares given to its executives for 2009 by about 29 percent compared to the previous year, according to a source, reflecting the mutual fund company's financial strength.

Fidelity added $111 to the value of each private share held by senior employees and others for 2009, according to a person notified by the company, who spoke on condition of anonymity as the comments were not authorized.

Last year Fidelity confirmed that it had set the additional value of the shares for 2008 at $85.99, down from about $105 in 2007.

Anne Crowley, a spokeswoman for Fidelity, would not comment on the latest figure.

Family-controlled Fidelity does not break out full financial results, leaving industry specialists to view the value the company assigns to its internal shares as a rough metric of its overall health.

Given the problems other big financial companies experienced in 2009, "Folks should be relatively happy with the number" for 2009, said the source.

A prospectus last fall showed the company's operating income fell 6 percent for the first nine months of 2009 to $1.4 billion, a much smaller decline than many other big financial firms suffered.

The private company shares generate dividend-like payouts and can account for half the annual compensation of senior employees who hold them.

The increase in value hints at Fidelity's success in negotiating a difficult financial environment, and arguably gives it more time to deal with looming leadership and succession issues, said John Bonnanzio, who edits a newsletter for Fidelity investors.

Fidelity's future as its chairman and chief executive, Edward C. "Ned" Johnson III nears his 80th birthday this summer.

For now, "whatever they are doing, they are doing it right," said Bonnanzio.

Officially, 51 percent of Fidelity's voting stock is held by employees, with the remainder owned by Fidelity's founding Johnson family.

Separately, Fidelity said there would be more executive departures.

News in January that Ned Johnson's number two executive, Rodger Lawson, would retire in March led to renewed attention to Fidelity's senior staff.

Lawson replaced a number of Fidelity's senior leaders since joining in 2007, and now a new round of executive changes is under way.

According to Crowley, Michael Wilens will lead Fidelity's corporate operations, after spending a few months helping run the company's retirement unit.

Wilens was hired by Lawson in 2008 to run Fidelity's core mutual funds unit. His new post will include oversight of the company's operations and computer systems.

Information systems executive Dan Petrozzo will leave at the end of March for personal reasons, Crowley said. A replacement is being sought.

She said Fidelity had named Jim MacDonald as president of Workplace Investing. MacDonald and Wilens had shared oversight of the division after its past leader, Scott David, took a leave of absence in the fall.

Crowley also said that Charles Goldman would leave at the end of March. Goldman joined Fidelity in 2009 to oversee much of the business it does with independent financial advisers. Goldman will not be replaced, she said.

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Fidelity Investments has raised the value of shares given to its executives for 2009 by about 29 percent compared to the previous year, according to a source, reflecting the mutual fund company's financial strength. Fidelity added $111 to the value of each private share...
Fidelity,Internal,Payouts,Investments
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2010-26-05
 

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