Ameriprise's CEO made $126.5 million over the last two years

James Cracchiolo

Chairman, CEO

Ameriprise Financial Inc.

Note: Cracchiolo has realized a combined $126.5 million over the last two years, after making $63.3 million in 2020, as long-term equity awards granted in previous years continue to pay out for the only chief executive Ameriprise has had since it spun off from American Express in 2005.

Many other companies have adjusted their executive compensation plans over the past two years to adjust for the impacts of the pandemic. Ameriprise has not.

While Cracchiolo's annual salary hasn't changed in years, he earns millions of dollars in cash bonuses each year based on annual company performance. Revenue of $13.8 billion and earnings of $22.75 a share in 2021 — both records — earned Cracchiolo a $6.8 million cash bonus that was near the peak of the targeted range.

The biggest driver of his compensation each year is from at-risk equity awards he has been granted over the years. Those include stock options that have 10-year expiration dates and provide long-term incentive and performance share units, and restricted stock awards that reward him for company performance generally over three-year periods.

Company results determine the value of performance share units. From 2019 to 2021, the company's average return on equity and earnings per share growth rate earned executives 128% of the target award for that period.

Market performance of Ameriprise's shares also drives the value of the equity awards, including a 57.9% total return of Ameriprise stock in 2021.

Since the spin-off, Ameriprise's market capitalization has increased by more than 1,000%, while the S&P 500 Index has increased 440%, and American Express during that time has increased 315%.

Ameriprise shareholders have objected to the executive compensation packages over the years, voting down the packages at the company's annual meetings in 2018 and 2019. Those say-on-pay votes are non-binding but the board's compensation committee responded then by tweaking some of the elements of the executive compensation pay plans.

Ameriprise's stock market performance since then has rewarded shareholders and also elevated the value of equity awards granted to executives. At last year's annual meeting 88% of the shareholder votes were in support of the executive compensation plan.