Money manager Legg Mason Inc (LM.N) cut the compensation of Chief Executive Mark Fetting by 17 percent, to $4.94 million, in its latest fiscal year, citing "disappointments," such as a lagging stock price.
Executive compensation "was reduced to reflect the overall results," the Baltimore-based company said in its annual proxy statement filed with the U.S. Securities and Exchange Commission on Wednesday.
Disappointments included a 4 percent drop in revenue and a decline of 22 percent for the fiscal year in total stockholder return, a measure that includes share price performance and dividend payments.
Fetting and other officials made progress during the 12 months ended March 31 by reducing outflows from mutual funds and bolstering fund performance, the proxy noted.
Shares in Legg Mason fell 1 percent on Wednesday to $25.23 on the New York Stock Exchange.
Despite its performance during the past fiscal year, Legg Mason has done better in recent months. Through Tuesday, its shares were up 3 percent for 2012, compared to a 4.7 percent gain for the Dow Jones index of U.S. asset managers..DJUSAG
One boost came May 16 after the firm agreed to buy back notes held by private equity firm KKR & Co LP.(KKR.N).
The KKR deal did not affect activist investor Nelson Peltz and his firm Trian Fund Management, which owned 10.5 percent of Legg Mason's shares outstanding as of May 24, the proxy showed. Peltz remains on Legg Mason's board through 2013.
The largest stake in Legg Mason is now held by funds of a rival asset management firm, T. Rowe Price Group Inc (TROW.O), with 10.9 percent of shares outstanding, the filing showed.
(Reporting By Ross Kerber; editing by Jeffrey Benkoe and M.D. Golan)