Morgan Stanley's board of directors has given James Gorman a 17% raise in 2023, bringing his total compensation to $37 million in his final year as the bank's chief executive officer.
In addition to his base salary of $1.5 million, Gorman received a cash bonus of just under $9 million, according to a regulatory filing reviewed Friday. bloomberg.
Three-quarters of the 65-year-old bank president's bonus will be paid in deferred stock over three years, according to the filing, Bloomberg reported.
Morgan Stanley's board of directors announced at the time that Mr. Gorman's annual salary had been cut by 10% due to “challenging economic and market conditions,” and his compensation increased 17% to $31.5 million.
Despite Gorman's big pay raise, Morgan Stanley last week reported a hit to its 2023 earnings, saying profits fell 32% from a year earlier to $1.5 billion.
Net income for the three months ended Dec. 31 fell to $1.5 billion, or 85 cents per diluted share, compared with $2.2 billion, or $1.26 per diluted share, in the year-ago period. did.
“We remain positive about the year ahead,” new CEO Ted Pick said in his first earnings conference since taking over from Gorman as executive chairman this month.
Gorman will officially retire next May, ending his almost 20-year tenure with the company.
According to Bloomberg, Morgan Stanley said in a Friday filing that the compensation committee will set Pick's new base salary at $1.5 million, up from $1 million, in order to boost earnings at the same base salary that Gorman had when he was CEO. He also said that he approved it.
Pick's raise was retroactive to January 1, according to Bloomberg.
Unusually for Wall Street, the other two CEO candidates did not quit the bank despite losing promotions.
All three candidates – 55-year-old pick. Andy Saperstein, head of asset management and global marketing for the company. and Dan Simkowitz, head of investment management — all received special bonuses worth $20 million each.
The stock-based award was announced in an October filing with the Securities and Exchange Commission. It comes a day after the Wall Street giant ended months of speculation about who would replace Gorman.
Since then, Mr. Saperstein has overseen the firm's wealth management business in addition to his role as co-president, and Mr. Simkowitz (known to his colleagues as “Simko”) has replaced Mr. Pick. He became co-president with Mr. Saperstein.
The bank said in its filing that the $20 million each for Pick, Saperstein and Simkowitz “represents approximately the average annual variable compensation of the three executives,” and is comprised of 60% performance stock units. The performance period is from 2024 to 2026, it added. It is scheduled to be converted into stock in 2027.
Performance stock units are paid in full only if a company achieves a specific financial goal, but that goal was not immediately clear.
Each executive also received 40% restricted stock units that vest in January 2027.
“The Committee acknowledges the Board's assessment that ensuring each executive continues to provide excellent leadership in their new roles is critical to Morgan Stanley's continued success,” the SEC filing said. and awarded the award.”
