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Lasalle Investment Management
Five year summary
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JLL delivered overall excellent performance for 2015. The Company’s full-year 2015 fee revenue reached a record $5.2 billion, a 17% increase over 2014, led primarily by a 26% increase in Project & Development Services, a 25% increase in Capital Markets & Hotels, and a 16% increase in LaSalle. Fee revenue growth was not only broad-based by service line, but also geographically, with double-digit year-over-year percentage growth in all four business segments.
Each of JLL’s three Real Estate Services operating segments contributed to the results by increasing both its revenue and its operating income over the prior year, in each case in local currency:
LaSalle, our investment management business that constitutes our fourth operating segment, posted total revenue for 2015 of $467 million, up 20% in local currency from 2014. Advisory fees were $242.9 million for 2015, up 10% from 2014. Also included in LaSalle’s total segment revenue were incentive fees of $123.5 million, driven by mature funds primarily in Asia Pacific and Europe taking advantage of the capital markets environment to liquidate real estate holdings near the end of their stated investment periods. LaSalle’s equity earnings for 2015 were $70.1 million, a 50% increase as compared to 2014, driven by gains recognized from dispositions of legacy investments and from increases in asset values of investments. Operating income was $157.6 million for 2015, compared with $132.0 million for 2014, up 27%. In 2015, LaSalle's capital raising momentum continued with $5.0 billion in new equity commitments. Assets under management were $56.4 billion as of December 31, 2015, compared with $53.6 billion as of December 31, 2014.
In 2015, we completed 20 new acquisitions that expanded our capabilities in ten different countries. We maintained our balance sheet for growth, reflecting the Company’s strong cash generation. We also improved our investment grade credit rating to BBB+ (stable outlook) with S&P and to Baa2 (positive outlook) with Moody’s.
Also during 2015, JLL continued to win numerous awards that reflected the quality of the services it provides to our clients, the integrity of its people and its desirability as a place to work, including awards recognizing its (1) superior service to clients, (2) ethics program and corporate governance, (3) outsourcing capabilities, (4) consultancy capabilities, (5) “best place to work” environment and (6) environmental and energy management work for clients.
The following table illustrates the three-year relationship between company performance and the compensation of our President and Chief Executive Officer. We selected earnings per share and adjusted net income because of their high correlation with creating shareholder value.
(1) Adjusted net income, as applied by the Committee in the determination of the compensation of Named Executive Officers, represents net income attributable to common shareholders excluding certain significant restructuring and acquisition charges, at its discretion.
(2) Represents total direct compensation earned for year indicated, which will be different from the Summary Compensation Table for certain timing reasons indicated in the notes to the Table.
Return to shareholders
Total shareholder return (TSR) for 2015, including the reinvestment of dividends, was 7.0%. JLL has consistently delivered value to shareholders over the past five years, with an annualized return of 17.3% versus an S&P 500 return of 10.3%, both with the reinvestment of dividends. A $1,000 investment in JLL’s common stock on December 31, 2010 would have grown more than a similar investment in the S&P 500 index, in each case with the reinvestment of dividends.
Highlights of compensation committee actions
The Summary Compensation Table indicates the specific amounts we paid to the Named Executive Officers in respect of their 2015 performance. Highlights from the decisions the Committee made include the following: