At Baird, we have a vision of becoming the best middle-market financial services provider in the world. We are confident this goal is achievable because we strive to be the best at what we do and to deliver "Great outcomes. Done well." That passion is at the core of our personal and professional DNA as an organization. It is why we continually seek to strategically expand the depth and breadth of our capabilities for those we serve.
The core values that underlie this intensity of purpose have created a distinctive culture at Baird. Values like putting the interests of clients before our own, collaborating to achieve the best possible results and communicating with honesty and respect are not only personally empowering for associates, but competitively powerful for Baird. These values thrive in the atmosphere created by our independence and employee ownership. In early 2015, we were incredibly honored to be named one of FORTUNE's 100 Best Companies to Work For® for the 12th consecutive year. We ranked No. 5, marking our second consecutive year among the top 10 companies.
Our passion for providing insightful advice, quality execution and an exceptional experience is unquestionably the foundation of Baird’s remarkable long-term performance. Revenues advanced to a record $1.2 billion in 2014, up 12% over 2013.* Operating income totaled $135 million — also a record — an increase of 15% from the prior year. At 15.5%, Baird's return on book value, including the cash dividend paid to shareholders in December, again outpaced most of our competitors and did so without the substantial leverage many financial services firms employ to boost their returns.
Each of our businesses continued to excel in providing client service and solutions, and several achieved records in key metrics and revenue. Our results once again proved the value of having five complementary businesses that help diversify revenue and contribution. Among the many operating highlights of the year:Continue
*Financial results do not reflect the consolidation of certain private equity partnerships.
Baird stock performance is based on the change in book value per share for Baird Financial Group common stock and includes cumulative cash dividends per share of $7.50, $1.60, $1.65 and $1.85 paid in December of 2011, 2012, 2013 and 2014, respectively. Baird is privately held and no public market exists for its shares. Baird can repurchase shares of Baird stock at book value when associates leave the firm. Past performance does not guarantee future results.
The Standard & Poor’s 500 Stock Index and Standard & Poor’s 500 Financials Sector Index are unmanaged common stock indices used to measure and report value changes in the stocks comprising these indices. Indices performance information is obtained from Capital IQ and excludes dividends paid during the periods shown. Baird stock is not included in these indices.
We extended our record for operating profitably to 140 consecutive quarters. As we have perennially said, this terrific performance demonstrates the durability and responsiveness of Baird’s business platform. While that is satisfying, the more important advantage that consistent profitability gives us is the means to continue to invest in the business to serve more clients more effectively.
In 2014, we made the single-largest investment in Baird’s history when we acquired Seattle-based McAdams Wright Ragen. MWR, which is now fully integrated with Baird, brought us talented Financial Advisors, complementary research skills and an expanded footprint in the highly attractive Pacific Northwest market. Similarly, during 2013 we formed the Fixed Income Institutional High-Yield team, which researches, trades and sells corporate debt securities. They have added greatly to Baird’s fixed income performance despite the lackluster debt markets of the past two years. Not only are these teams making a significant contribution to Baird and its clients, they are also a great fit with the Baird culture.Continue
Source: SIFMA Securities Industry Employment Report
It is important to say that both of these very skilled groups chose to partner with Baird because of who we are and how we have built our business. We believe that the passion to excel is attractive – it attracts its own kind. These professionals, and hundreds of others who have sought out Baird, value not only our client focus but also the energy, creativity and enthusiasm that is evident across the organization. They also value Baird’s independence and employee ownership, which give us tremendous flexibility to be opportunistic in our growth and nimble in our decisions. Because we believe as many associates as possible should share in the responsibilities and rewards of ownership, we substantially expanded the opportunity for them to become owners over the past two years. Approximately 62% of Baird’s 3,172 associates are now shareholders, with ownership very broadly distributed throughout the organization.
The self-determination that ownership and independence give us to invest on behalf of our clients cannot be overstated. Through good markets and bad, it has enabled us to build our Private Wealth Management and Fixed Income Capital Markets businesses into dynamic and differentiated national competitors. Asset Management is investing in its team and investment platform to support exceptional growth in assets. Our Institutional Equities team offers the products, services and research that have driven market share gains domestically and internationally. Global Investment Banking and Baird Capital have both created collaborative global platforms that are among the best in the middle market.
Supporting our growth in ways that enhance the experience of clients and associates is a key business priority for Baird. Over the past several years, we have increased our investment in information technology to ensure our systems reflect industry best practices. In 2014, we began implementation of a multiyear, forward-looking plan targeting strategic IT priorities. These priorities form a roadmap that will allow us to accelerate enhancements to our client service and client experience and provide our associates with more tools and capabilities. We also continued implementation of complementary productivity initiatives to help associates be more efficient and effective in serving clients and each other.
Over the past 95 years, Baird has built a very durable business. We are financially strong, with an outstanding senior management team and a remarkable group of associate-owners who are motivated daily to serve our clients and each other with energy, expertise and entrepreneurial spirit. With that strong foundation, we are exceptionally well positioned to capture opportunities that will allow Baird to grow in a thoughtful way for our clients. In our view, thoughtful growth is strategic, incremental expansion that adds reach or deepens expertise to meet the evolving needs of those we serve.
The truth is that we grow primarily for the benefit of our clients. They are the ones who have helped us build the business so we could serve them more effectively. And that is why we are exceptionally grateful for the trust and support they place in Baird year after year. It inspires our passion to excel in everything we do.