Franklin Resources CEO Gets $2M Bonus
Dec. 24, 2003
WASHINGTON (AP) _ Mutual-fund company Franklin Resources Inc. Chairman and Chief Executive Charles B. Johnson received a $2 million bonus in the fiscal year ended 2003, according to a filing Wednesday with the Securities and Exchange Commission.
The San Mateo, Calif.-based company, which operates as Franklin Templeton Investments, also paid its two co-presidents _ Martin L. Flanagan and Gregory E. Johnson _ about $2.18 million in bonuses and other performance-based awards in the year ended Sept. 30, the filing said.
As reported, Flanagan and Johnson will become co-CEOs effective Jan. 1, 2004. Johnson will remain chairman of the board.
Johnson's bonus brought his 2003 compensation to $2.7 million, including his $594,330 base salary and $75,222 worth of personal use of the company's aircraft. He received no bonuses in the two previous years.
Franklin also said William J. Lippman had resigned from his post as senior vice president of the company to focus on portfolio management. He remains president of Franklin Advisory Services.
The decision to resign was made in May, and was unrelated to current mutual-fund investigations, according to Franklin spokeswoman Lisa Gallegos.
Franklin has received subpoenas from federal investigators in connection with the mutual-fund trading probes. On Monday, it said it had found some instances of frequent trading by a few employees in their personal 401(k) plan accounts.
Rapid trades are part of the strategy known as market timing, which takes advantage of brief discrepancies between a fund's share price and its underlying holdings.
Such trading isn't necessarily illegal, but regulators say that if mutual-fund companies with stated policies against timing permitted such trades while profiting from them, that could be a violation of securities laws.
Franklin said the rapid-trading employees included one trader and one officer of the funds. It did not identify them further. Both have been placed on administrative leave and the officer has resigned.
Franklin shares closed Wednesday at $51.14, down 19 cents, or 0.4 percent, on the New York Stock Exchange.