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Profits, assets and hiring increase at T. Rowe Price

The number of employees at Baltimore asset manager T. Rowe Price Group Inc. increased 4 percent from the end of 2010 to the end of 2011, bringing the company almost back to peak employment levels.

T. Rowe Price CEO James A.C. Kennedy

The high point for associates was 5,319 at the end of 2008. The peak at its Owings Mills campus was 2,760 in September 2008, according to numbers provided by the firm.

The company ended 2011 with 5,255 associates, including 2,565 in Owings Mills and 1,194 at its downtown office.

T. Rowe has about 150 open positions, said CEO James A.C. Kennedy, speaking to reporters after the company’s annual shareholders’ meeting Tuesday. About 100 of those positions are at the firm’s Maryland offices, according to the company’s website.

Kennedy also said he expects the firm to move forward with the decision to furnish two unoccupied buildings on the Owings Mills campus over the next month.

Construction on the buildings was completed in November 2009, but “because shareholders stopped calling as much and the processing went down relative to our expectations, we didn’t need those buildings as early as we thought,” Kennedy said.

Once the decision to move forward is made, it will take about a year to ready the buildings with furniture and equipment, and occupancy could start by the second half of 2013, Kennedy said. The buildings can accommodate about 1,400 people, according to a spokesman for the company.

Pay for T. Rowe’s executives also increased in 2011 as its assets under management and net income continued to grow.

At the annual meeting held at the company’s suburban campus in Owings Mills, shareholders overwhelmingly approved the pay scale for executives.

Kennedy was paid a total of $7.9 million for 2011, coming mainly from a $5.5 million cash bonus based on the company’s performance, according to the company’s proxy statement. Kennedy earned $7.1 million in 2010 and $4.7 million in 2009.

Brian C. Rogers, the company’s chief investment officer and chairman of the board, earned $7.7 million in 2011, including a $5.5 million cash bonus and $1.8 million in stock options. Rogers earned $6.9 million in 2010 and $4.7 million in 2009.

Edward C. Bernard, vice chairman and president of T. Rowe Price Investment Services, earned $7.2 million for the year, compared to $7 million last year and $4.4 million in 2009.

The executives also addressed the company’s 2011 performance during the meeting.

The firm ended the year with about $490 billion in assets under management, an $8 billion, or 1.5 percent, increase from the end of 2010. The company’s net income for 2011 was $773.2 million, a 15 percent increase from 2010, but net cash flow from investors totaled $14.1 billion for the year, down from $30.3 billion last year.

Kennedy cited the tsunami and earthquake in Japan, growing debt in Europe, U.S. housing and energy prices, the national political climate and concern about the level of economic slowdown in China as issues that affected the markets.

“Each of these undermined the confidence and the sustainability of the economic recovery, as well as prices in the market place,” Kennedy said. “In spite of this volatility in 2011, T. Rowe price has generally performed very well for our clients and shareholders.”

T. Rowe Price increased its dividend paid annually to shareholders in 2011, as it has every year since going public in 1986.

Bernard said he sees the company as “underpenetrated” with U.S. intermediaries, such as financial advising firms Merrill Lynch, Smith Barney and Edward Jones, and international clients.

“We’re underpenetrated [in U.S. intermediary markets] not because we didn’t have a good value proposition, but because we weren’t there, so I see considerable growth there, and the same thing is true outside of the U.S.,” he said, adding that the company has clients in 35 countries.