Highest-Paid Forex Broker CEOs: How to Read the Pay Numbers

Who were the forex broker CEOs in the 2017 pay stories?

In 2017, this page compared the pay of the bosses of big forex and CFD brokers. It named Asaf Elimelech of Plus500, Peter Hetherington of IG Group and Peter Cruddas, the founder of CMC Markets. All 3 companies were listed on the London Stock Exchange and published annual reports.

It also mentioned Brendan Callan of FXCM and Yoni Assia of eToro, but gave no published pay figures for them. These are the roles people held in 2017. They are not a claim about who holds each job today.

That comparison put very different numbers in one league table: salaries, a bonus, a share award and an estimate of personal wealth. That makes a ranking look exact when it is not.

Pay is still worth understanding. How a company rewards its bosses can shape its priorities. You just need to read the numbers carefully, one line at a time.

What is the difference between salary, bonus and share awards?

A CEO's pay can come in several parts. They are paid at different times, under different rules, and some may never be paid at all.

The words used in a pay report matter. A share award can be granted, vested or exercised. Granted means promised. Vested means the conditions were met. Exercised means the shares were actually taken. These are not the same thing.

Also check the units. Many reports show figures in thousands, so "575" can mean 575,000.

What did IG's 2017 pay report actually show?

IG Group's 2017 annual report has a detailed pay section. One table lists awards made in the year to 31 May 2017. It shows options valued at £2,061,739 awarded to P G Hetherington, for performance up to 31 May 2016.

The report describes them as nil-cost options with conditions still attached. So this is the value of an award when it was made. It is not his cash salary, his cash bonus or what he took home in 2017.

Notice the dates. IG's financial year ended in May, not December. A report published in 2017 can describe awards linked to an earlier year. If you copy the number without its dates and conditions, you change what it means.

For the other companies, start with the source. Plus500 and CMC Markets keep their older annual reports on the investor pages of their websites. The links are in the sources below. A news story can help you find a claim, but the report table and its notes tell you what was measured.

How should I compare two CEOs' pay?

Compare one line at a time. Here is a made-up example:

• CEO A gets a £500,000 base salary and a £300,000 cash bonus. That is £800,000 in cash.
• CEO B gets a £400,000 salary and a share award worth £700,000 when granted. It vests over 3 years, if targets are met.

A gets more cash now. B has the bigger headline total, £1.1 million. But neither fact tells you who will end up with more. B's shares could be worth much more, or nothing, by the time they vest.

Now say B also owns shares that pay £200,000 in dividends. That is income from owning shares, like any shareholder gets. It needs its own label. Adding it to pay would make a salary comparison misleading.

Before comparing, write down each person's role, the date the financial year ended and the currency. If a report has no matching figure, leave the cell empty and explain why. An empty cell is more honest than a total of unlike numbers.

Does a highly paid CEO mean a safe broker?

No. Pay tells you about the company's choices, not about how it treats customers. A big package does not prove a broker is good, bad or safe.

Here is a real reminder from the same year. In February 2017, the CFTC, a US regulator, said FXCM had misled retail forex customers. It found that FXCM hid its ties to a market maker that took the other side of most of its customers' trades. FXCM and its founders were ordered to pay a $7 million penalty. They also agreed to give up their CFTC registration.

If you read a pay report, look at what the bonus rewards. Are bosses paid for lasting results, fair treatment of customers and risk control? Or mainly for short-term growth?

Is a company with a higher share price worth more?

Not necessarily. A share price that is higher than a rival's tells you the price of one share, not the size of the company.

To compare company size, you need the market value, also called market capitalisation. Multiply the share price by the number of shares.

Read more in what is market capitalisation. To practise reading company reports, try the Stocks and Investing learning path. The point of this story is a cleaner comparison, not a broker recommendation.