Alex. Brown pays 2 chiefs $14 million Krongard makes $7.7 million

Shattuck gets $6.3 million

'95 was company's best year

Executives' pay included forgiven loans to buy stock

March 22, 1996|By Jay Hancock | Jay Hancock,SUN STAFF Bloomberg Business News contributed to this story.

Alex. Brown Inc., flush from a banner year for Wall Street, paid its top two executives $14 million last year.

The Baltimore investment house nearly tripled the compensation Chairman and Chief Executive Officer A. B. "Buzzy" Krongard to $7.7 million, as it forgave a loan it had granted him to buy company stock and notes, according to regulatory filings.

And Mayo Shattuck III, the No. 2 executive, earned $6.3 million.

Several other Alex. Brown executives also received seven-figure pay packages after what the Baltimore-based investment concern's compensation committee called "the best year in the company's history in terms of both revenues and net income."

Many investment houses and their executives made out well last year, as the stock market soared and bond and equity offerings continued to boom.

This month, T. Rowe Price Associates Inc., the Baltimore-based mutual-fund house, said it paid more than $1.5 million last year to each of its top six executives.

Mr. Krongard's compensation included $3.9 million in a forgiven loan and related tax payments, according to a proxy statement filed yesterday by the company with the Securities and Exchange Commission.

For Alex. Brown President and Chief Operating Officer Shattuck, total pay last year came to $6.3 million. His package included $2.9 million in a forgiven loan.

Both Mr. Krongard and Mr. Shattuck were granted the loans to increase their stock ownership "and thereby further align their interests with the company's stockholders," the company said.

The executives' 1995 pay was a significant jump from the $2.7 million Mr. Krongard earned and the $2.3 million Mr. Shattuck earned in 1994 when the company's profitability slipped slightly below 1993 earnings.

The loans made to Mr. Krongard and Mr. Shattuck allowed the executives to buy common stock and convertible debentures, the company said in the SEC filing.

Beverly Wright, the company's chief financial officer, said in an interview that the executives would have a greater economic interest in stock for which there was not an outstanding loan to the company, and therefore more incentive to pursue the interests of shareholders.

Alex. Brown's annual net income rose 35 percent to $95.6 million in 1995, up from $70.9 million in 1994. Revenue for 1995 rose 34 percent to $809.4 million, up from the $605.5 million a year earlier.

The other three highest-paid Alex. Brown executives last year were managing directors W. Gar Richlin, Bruce H. Brandaleone and Denis J. Callaghan.

The company's stock closed at $50 per share yesterday, up 13 cents but below a 52-week high of $60.63.

Pub Date: 3/22/96

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