TD Ameritrade CEO compensation drops 60 percent in fiscal 2009 because stock inflated 2008 pay

TD Ameritrade’s CEO compensation drops in 2009

OMAHA, Neb. — TD Ameritrade Holding Corp. gave president and CEO Fred Tomczyk significantly less compensation last year, but the drop to $4.8 million from $13.5 million doesn’t reflect displeasure with Tomczyk’s first year of leadership.

The Omaha-based company said it was pleased with the results Tomczyk and Ameritrade’s other top executives delivered in a difficult economy, according to a company filing with the Securities and Exchange Commission on Friday.

The main difference was Tomczyk received significantly larger restricted stock option grants in fiscal 2008 as part of a long-term compensation plan before he became chief executive in October 2008 at the start of Ameritrade’s 2009 fiscal year.

The 238,958 stock options Tomczyk received in fiscal 2009 were worth almost $3 million on the day they were awarded, down from the $10.4 million in stock options he received in fiscal 2008.

Ameritrade Chairman Joe Moglia again earned more than Tomczyk in fiscal 2009. The former Ameritrade CEO received compensation worth $6.5 million, which included an incentive payment of $5.5 million cash.

But Moglia’s 2009 compensation was also significantly lower than the previous year when he received compensation worth $21.7 million, which included a $15.2 million cash incentive to recognize his successful tenure leading the company from 2001 to 2008.

Ameritrade’s board approved giving all top executives as much as 115 percent of their target incentive bonuses in fiscal 2009 because the company earned $1.10 per share, or $643.7 million. But some of the incentive payments were reduced based on individual performance measures.

Ameritrade’s 2009 net income fell below the $1.33 per share, or $803.9 million, the brokerage earned in 2008, but lower interest rates limited Ameritrade’s asset-based revenue and its expenses rose with the acquisition of options-trading specialist thinkorswim.

The Associated Press calculations of total pay include executives’ salary, bonus, incentives, perks, above-market returns on deferred compensation and the estimated value of stock options and awards at the time they are granted during the year. The calculations don’t include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission.

Ameritrade will hold its shareholder meeting in Omaha on Feb. 25. Besides routine items like re-electing directors, shareholders will be asked to approve two changes to the company’s long-term incentive plan.

The company wants permission to award stock options to directors and consultants, as well as Ameritrade employees.

And Ameritrade wants the authority to change the vesting schedule of stock options it awards. Currently, Ameritrade’s incentive plan dictates that stock awards do not vest until three years after they are awarded.

On the Net:

TD Ameritrade Holding Corp.: www.amtd.com