The best paid CEO on Wall Street is old-fashioned and obsessive

Mario Gabelli, the CEO of Gamco Investing Inc., was the best paid chief executive among Wall Street's publicly traded firms last year.

Gabelli raked in a cool $88.5 million in 2014, according to a ranking from the New York Times.

His secret sauce: an old fashioned investment strategy that is increasing out of favor, according to Kirsten Grind at The Wall Street Journal.

Gabelli is an active value investor, and aims to outperform the market by personally picking undervalued stocks.

That style of investing has starting losing assets to passive index funds. Investors pulled $98.4 billion out of active funds in 2014, according to Morningstar, while passive funds like exchange-traded funds saw inflow of $166.6 billion in the same period.

Old fashioned

Gabelli personally gets to know company executives before investing. He spends most week nights reading earnings and scouring industries for an event or regulation that suggests a stock is undervalued.

His aim is to identify smaller, so-called "unloved" companies.

"Some of them do need training wheels, and we do take advantage of that. For example, we love Pep Boys, gotten them back on focus, we put directors on a variety of companies, but we also want to eliminate poison pills," Gabelli said to Barron's editor Jack Otter during a Morningstar Investment Conference in June.

Pep Boys refers to the Philadelphia-based tire and auto repair company.

He has recently gone bullish on adult diapers in anticipation of the aging boomer population, according to The Wall Street Journal.

Gabelli is able to instantly "recall pertinent details" about his fund, the Gabelli Equity Trust, despite running 26 others at the time, said Mike Taggert of Morningstar, who met the CEO during Morningstar's conference.

That may have contributed to the success of his mutual fund. An investor who put in $10 million into Gabelli's fund in 1978 would now have $2.2 billion, while the same investment in the S&P 500 would have generated $645 million, ValueWalk reported.

Read the Wall Street Journal article here.