President & Chief Executive Officer
While this annual report reflects on 2019, we would be remiss if we did not acknowledge how much our world changed in spring 2020 with the global COVID-19 pandemic. As a privately held, employee-owned firm, Baird is well-positioned for these unprecedented times. Over our 100-year history, we've remained strong for our clients by putting their interests first – always. We are committed to supporting our clients through these difficult times and know that, working together, we will get through this and be stronger for it.
As we saw with the rapid rise of the COVID-19 pandemic, our world is evolving at an extraordinary pace. This pace of change presents new challenges and new opportunities, as well as decisions whose answers will shape the years ahead. Clients turned to Baird for thoughtful advice, innovative solutions and reliable relationships in 2019. In a year that blended continued economic and geopolitical uncertainty, slowing growth and low interest rates with a record bull market run, we continued to guide clients as they pursued their unique goals.
2019 was also a particularly historic year for Baird. We were incredibly proud to celebrate our 100th anniversary as a firm, both with one another and with our clients. In June, the Baird family gathered in our hometown of Milwaukee, Wisconsin, to mark the centennial together. Seven thousand Baird associates, relatives, retirees and friends traveled from near and far for the occasion.
We also completed the biggest investment in our firm's history by acquiring Hilliard Lyons, one of the oldest investment firms in the United States. We are humbled Hilliard chose to partner with us. We shared a decades-long relationship prior to our investment, which gave us great confidence that our values and our business philosophies would be a great fit for all of our clients. Hilliard assumed the Baird name in late 2019, and our now-combined offerings in private wealth management, investment banking and public finance are stronger than ever.
We wouldn't be where we are today without Fred Kasten and Paul Purcell, both of whom served as President, CEO and Chairman. Both played essential roles in growing Baird, fostering our culture and carrying out our tradition of community involvement. Fred, who passed away in December 2019, championed our culture and distilled our philosophy of business, life and purpose into a guiding principle we call The Baird Way. We will honor his memory by continuing to bring The Baird Way to life in all we do. In that spirit, the Medical College of Wisconsin has established the G. Frederick Kasten, Jr. Endowed Chair in Parkinson's Disease Research, a new chair made possible with contributions from friends of Fred, Baird associates and the Baird Foundation. Paul, who passed away in February 2020, joined Baird during Fred's tenure and continued to build our business and our distinct culture. His enthusiasm, drive, and relentless belief in our team helped the firm achieve new heights of growth and success. In honor of Paul's many contributions to Baird and the communities we call home, the Baird Foundation will be making a donation in his honor.
One of Fred and Paul's greatest legacies is making Baird a great workplace for our associates. We've maintained that commitment as we've grown as a firm. In early 2020, we were recognized among the Fortune 100 Best Companies to Work For®, ranking No. 13 in our 17th consecutive year among the honorees.
We ranked No. 13 in 2020 - our 12th straight year among the top 25 companies.
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We achieved strong results by continuing to focus on putting our clients' interests first and driving strategic progress across Baird. Our 2019 revenues were $2.06 billion, our 10th consecutive year of record revenues.1 Operating income totaled $261.7 million, also a new record. Our return on book value was 14.2%, including a cash dividend paid to shareholders in December, a result we believe to be among the strongest in our industry. We are proud to have attained this result without relying on the substantial leverage used by other firms to lift returns.
These strong outcomes are founded in our platform of five complementary businesses. The strategic value of this model proved out once again in 2019. While some of our businesses faced strong headwinds, each performed well and we continued to win market share. There were many notable developments across the firm, including:
1Financial results do not reflect the consolidation of certain private equity partnerships.
2Ipreo MuniAnalytics as of December 31, 2019, based on lead managers. Does not include private placements or notes.
3Greenwich Associates North American Equity Investors - U.S. Small-/Mid-Cap Funds and U.S. Equities Sales, Corporate Access & Research, May 2019. Surveys conducted with 100 small-cap and mid-cap fund managers and 169 fund managers and 269 traders, respectively. Rankings for qualitative metrics based on leading research firms in surveys.
Baird stock performance is based on the annual 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, $1.85 and $2.00 paid in December of 2011, 2012, 2013, 2014 and 2015, 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.