Richard Steinmeier
LPL Financial HoldingsAbout Richard Steinmeier
Richard Steinmeier (age 51) is Chief Executive Officer of LPL Financial Holdings Inc. and has served as a director since October 2024; he joined LPL in 2018 after senior roles at UBS, Merrill Lynch, and McKinsey, and holds a B.S. in economics from Wharton and an MBA from Stanford . In 2024, LPL’s share price rose 43%, advisory/brokerage assets grew 29% to $1.7T, and Adjusted EBITDA increased 7% to $2.2B, underpinning incentive outcomes during his first months as CEO . LPL reported 2024 revenue of $12.4B and highlighted outperformance in organic growth and recruiting (recruited assets $149B), while acknowledging vertical integration and technology stability challenges; 3‑year TSR over the 2022 PSU cycle was 105%, paying out at the 200% maximum on 2/25/2025 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| LPL Financial | Chief Executive Officer; Director | CEO since Oct 2024; Director since Oct 2024 | Led succession transition; continued focus on growth strategy; board-level oversight . |
| LPL Financial | Managing Director, Chief Growth Officer | May 2024 – Oct 2024 | Led strategy, advisor/institution recruiting, employee advisor field management, capital solutions, marketing/communications . |
| LPL Financial | Managing Director & Divisional President, Business Strategy & Growth | Nov 2023 – May 2024 | Drove corporate and business-line strategy and growth initiatives . |
| LPL Financial | Managing Director & Divisional President, Business Development | Aug 2018 – Nov 2023 | Scaled advisor/institution recruiting; company states organic growth rate more than doubled since 2018 . |
| UBS Wealth Management Americas | Managing Director, Head of Digital Strategy & Platforms | Sep 2017 – Aug 2018 | Led digital strategy/platforms in US wealth business . |
| UBS Wealth Management Americas | Managing Director, Head of Emerging Affluent Segment & Wealth Advice Center | Aug 2012 – Sep 2017 | Ran mass‑affluent segment and centralized advice center . |
| Merrill Lynch | Managing Director, Merrill Edge Advisory Center (prior roles at Merrill) | Feb 2009 – Aug 2012 | Managed retail advice center scaling digital/phone advisory . |
| McKinsey & Company | Engagement Manager | 2002 – 2006 | Strategy/operations projects for financial services . |
External Roles
| Category | Details |
|---|---|
| Other public company boards (current/past 5 yrs) | None disclosed . |
| Non‑profit/academic boards | Not disclosed in proxy . |
Fixed Compensation
| Element | 2024 (reported/approved) | Notes |
|---|---|---|
| Base salary | $900,000 effective Oct 21, 2024; salary paid in 2024: $663,461 | CEO package set Oct 17, 2024; salary paid reflects partial year . |
| Target annual bonus | 300% of base post‑CEO (target $2,700,000); 245% pre‑CEO (prorated target $1,751,548) | Targets and proration disclosed; CEO target 300% . |
| Target LTI (annual) | $8,400,000 (70% PSUs/30% RSUs) | Approved with CEO package; granted Feb 25, 2025 under revised LTI approach . |
Performance Compensation
2024 Annual Bonus – Framework, Metrics, and Payouts
| Metric (Baseline Weight) | Target/Definition | Actual 2024 | Payout vs Baseline |
|---|---|---|---|
| Incentive EBITDA (30%) | $2,340M | $2,305M (99% of target) | 96% payout for this component . |
| Relative TSR (10%) | Percentile vs S&P1500 Capital Markets sub‑industries peer cohort | 44th percentile | 88% payout for this component . |
| Business Goals (40% total): Horizontal (15%), Vertical (15%), Enablers (10%) | Board‑approved strategic execution goals | Ratings: Horizontal Exceeds; Vertical Meets/Partially; Enablers Meets | Component funded at 46% (vs 40% baseline) . |
| Committee Discretion (20%) | ± up to 20% adjustment | No adjustment | 0% adjustment . |
| Bonus pool funding; scale | Target pool $122M; Actual $126M (5.5% of Incentive EBITDA) | $126M; bonuses for MD+ scaled above pool % | Funding methodology and outcomes . |
| Executive | Target Bonus ($) | Actual Bonus ($) | % of Target | Pay Date |
|---|---|---|---|---|
| Richard Steinmeier | 1,751,548 | 2,000,000 | 114% | Mar 7, 2025 . |
Long‑Term Incentives (Design and Grants)
| Grant/Policy | Details | Vesting/Performance |
|---|---|---|
| 2024 RSU grant | 2,603 RSUs ($678,516 grant‑date fair value) on 2/25/2024 | 3 equal annual installments starting 2/25/2025 . |
| 2024 PSU grant | Target 3,905 PSUs; Max 7,810 ($1,344,101 fair value); performance period 2/15/2024–2/14/2027 | Relative TSR vs S&P1500 Capital Markets cohort; 0–200% payout; capped at 100% if negative TSR . |
| 2025 CEO LTI award | $8,400,000 (70% PSUs/30% RSUs), granted 2/25/2025 | PSUs 3‑yr relative TSR (2/15/2025–2/14/2028); RSUs vest 3 equal annual installments . |
| 2022 PSU payout | Company TSR 105% and >80th percentile; PSUs paid at 200% and vested 2/25/2025 | Reflects strong 3‑year TSR cycle performance . |
| Options policy (2024) | No stock options granted to NEOs in 2024 | Governance note (no re‑pricings) . |
Equity Ownership & Alignment
| Item | Data |
|---|---|
| Beneficial ownership (3/24/2025) | 22,113 shares; <1% of outstanding . |
| Outstanding RSUs (12/31/2024) | 871; 1,238; 2,603 unvested RSUs (market values $284,390; $404,219; $849,906 at $326.51) . |
| Outstanding PSUs (12/31/2024) | 5,568 earned PSUs from 2022 cycle (vested 2/25/2025); future-cycle PSUs shown at maximum 7,810 for disclosure . |
| Options | None outstanding for Steinmeier; no option exercises in 2024 . |
| 10b5‑1, hedging/pledging | 10b5‑1 policy in place; hedging and pledging prohibited . |
| Ownership guidelines | CEO required to hold 6× base salary; all NEOs (incl. Steinmeier) in compliance as of 3/24/2025 . |
Vesting schedules and potential supply:
- RSUs vest in 3 equal annual tranches from each grant date (e.g., 2024 RSUs vesting on 2/25/2025, 2026, 2027), which can create periodic tax‑withholding‑related sales and modest supply near vest dates .
Employment Terms
| Scenario (as of 12/31/2024) | Cash Severance | Bonus | Equity Treatment | COBRA | Total |
|---|---|---|---|---|---|
| Termination without cause / for good reason | $900,000 | $2,000,000 (most recent bonus) | RSUs scheduled within 12 months accelerated ($769,584); PSUs vest pro‑rata at target ($2,169,659) | $17,444 | $5,856,687 . |
| Death/Disability/Retirement | — | — | RSUs generally accelerate/continue per grant; PSUs pro‑rata at target ($2,169,659) | — | $3,708,175 . |
| Double‑trigger Change‑in‑Control | $1,350,000 (18 months base) | $4,050,000 (150% of target bonus) | RSUs accelerate ($1,538,516); PSUs pro‑rata at target ($2,169,659) | $26,166 | $9,134,341 . |
Additional terms and governance:
- Executive Severance Plan covers MD+ executives; no individual employment agreements; non‑compete 12 months (18 months after CoC) as a condition to benefits; modified parachute cutback; no excise tax gross‑ups .
- Clawbacks: SEC‑aligned restatement clawback plus supplemental clawback for willful misconduct; anti‑hedging/anti‑pledging policy enforced across officers and directors .
Board Governance (Director Service, Roles, and Dual-Role Implications)
| Attribute | Details |
|---|---|
| Board service | Director since 2024; one of 10 directors . |
| Independence | Not independent (as CEO); all committees composed solely of independent directors . |
| Committee roles | None (CEO not on Audit/Risk, Compensation, or Nominating) . |
| Board leadership | Separate independent Chair (James S. Putnam); board states separate Chair/CEO enhances oversight . |
| Attendance | In 2024, each director attended ≥75% of Board/committee meetings during their service period; Board held 12 meetings . |
| Director compensation | Employee directors (incl. Steinmeier) receive no additional director pay . |
| Director compensation policy (context) | Non‑employee directors: $285k total retainer (cash/equity mix), plus committee chair/member retainers; ownership guidelines apply . |
Implications: Dual CEO/director role is mitigated by an independent Chair and fully independent committees; only one non‑independent director (Steinmeier) serves on the board, addressing typical independence concerns .
Performance & Track Record
- 2024 outcomes: share price +43%; advisory/brokerage assets +29% to $1.7T; Adjusted EBITDA +7% to $2.2B; gross profit +12% to $4.5B; organic net new assets $140.7B (10% growth) and total net new assets $235.6B including M&A .
- Strategic execution: Horizontal Expansion scored “Exceeds” (recruited assets $149B; above‑target organic growth 11%); Vertical Integration “Meets/Partially” (higher attrition from separation of misaligned enterprises; NPS below target due partly to tech stability); Enablers “Meets” (solid engagement, top‑talent retention) .
- Incentive alignment: 2024 bonus pool funded $126M (5.5% of Incentive EBITDA) with Steinmeier at 114% of his prorated target, reflecting corporate and individual leadership through the transition .
- Multi‑year alignment: 2022 PSU cycle paid 200% at 3‑yr TSR 105% (vested 2/25/2025), signaling strong relative performance through the lookback period .
Compensation Committee Analysis (Pay Governance)
- Committee composition and independence: Compensation Committee comprised solely of independent directors; chaired by Allison H. Mnookin .
- Consultant: Frederic W. Cook & Co. engaged as independent advisor; no conflicts identified .
- Peer groups: 2024 peer group updated to include BK, FIS, STT, TROW and remove BFH, SEIC, WU; used for 2025 target setting .
- Say‑on‑Pay: ~97% approval at 2024 annual meeting .
- Governance features: stock ownership guidelines; clawbacks; no hedging/pledging; no employment agreements for executives .
Director & Executive Perquisites, Deferred Comp, Related Parties
- Perquisites: Executive financial services reimbursement (up to $15k); Steinmeier received $11,105 in 2024; 401(k) match $20,700; no relocation benefits reported for him in 2024 .
- Deferred compensation: Steinmeier did not participate in 2024; plan available to select executives .
- Related party transactions: Review governed by Audit & Risk Committee policy; 2024 transactions disclosed with large shareholders Vanguard and BlackRock; no Steinmeier‑specific related‑party dealings disclosed .
Compensation Structure Risk Signals
- Mix skews to at‑risk pay (93% variable for CEO at target) with multi‑year PSUs tied to relative TSR; reduced option usage lowers risk of repricing; no hedging/pledging allowed .
- Bonus framework uses Incentive EBITDA and business goals plus relative TSR; pool discretion constrained; quantified payout curves reduce subjectivity .
- Clawback coverage for restatements and willful misconduct enhances recourse; double‑trigger CIC benefits exist but moderated by cutback provisions and equity proration .
Investment Implications
- Pay‑for‑performance alignment is robust: 70%–80% of LTI in PSUs (CEO at 70%), multi‑year relative TSR, and strong 2022 PSU max payout support linkage of realized pay to shareholder outcomes .
- Retention risk appears moderate: substantial unvested RSUs/PSUs, CEO 6× salary ownership requirement (met), and no pledging reduce flight risk; periodic RSU/PSU vesting may create modest selling pressure near vest dates for tax withholding .
- Change‑in‑control economics are material but not excessive for a company of LPL’s scale (CEO ~$9.1M double‑trigger package as of 12/31/2024), with proration on PSUs and clawback policies limiting windfalls and misconduct risk .
- Execution watch‑items: 2024 vertical integration scorecard flagged attrition and technology stability; monitoring client experience metrics and platform resiliency under Steinmeier’s leadership is warranted despite strong recruiting/organic growth momentum .
- Governance mitigants to dual CEO/director role—independent Chair and fully independent committees—reduce independence concerns; continued strong Say‑on‑Pay support (97% in 2024) suggests investor alignment with compensation design .