2013 Was a Good Year for the Wallet of Morgan Stanley’s CEO
Investors have let Morgan Stanley (NYSE:MS) know they approve of the steps the investment bank has taken to improve its profitability; throughout 2013, shares of Morgan Stanley rose 64 percent, the greatest stock gain recorded by any of the 10 largest investment banks in the world. The reason for such confidence was Chief Executive Officer James Gorman’s mission to cut costs and improve margins in Morgan Stanley’s brokerage unit. Now, the investment bank’s management is showing Gorman they approve of his direction as well; boosting his compensation package for the past year with an increased cash bonus and long-term incentives.
The 2013 compensation package Gorman, chair and chief executive officer of Morgan Stanley, included 155,207 restricted shares, according to a filing made January 22 with the U.S. Securities and Exchange Commission. That amounts to a $5.06 million stock bonus — a sum nearly double his equity award of the previous year. Those shares come on top of his $1.5 million salary, which was nearly doubled from his 2012 paycheck of $800,000.
In addition to that 800,000 salary, Gorman’s 2012 compensation package was comprised of $2.63 million in stock options and $2.58 million in deferred cash. He also received a $3.75 million long-term incentive, which was dependent on the bank hitting specific performance targets. Further details about his cash bonus and long-term incentives will be made public later this year.
While Gorman has done much to streamline Morgan Stanley, problems linger. Since fourth-quarter earnings were released the morning of January 17, shares have lost 5 percent of their value. The problem was not revenue; thanks to strength in investment banking, global wealth management, and asset management, the institution beat Wall Street’s top-line expectations. Rather, Morgan Stanley’s $1.2-billion legal bill, which caused profit to take a sharp fall, gave investors a source of concern.