By Justin Baer
Morgan Stanley gave its top executive an 85% raise, rewarding
James Gorman for returning the Wall Street firm to profitability
and making progress on his turnaround plan.
Mr. Gorman, the firm's chairman and chief executive, received a
total compensation package of $18 million, up from the $9.75
million he received last year after the firm posted a 2012 loss.
The pay total included $12 million in salary and bonus for his
performance in 2013 as well as $6 million awarded through the New
York firm's long-term incentive plan for senior executives, Morgan
Stanley said Friday in a regulatory filing.
Morgan Stanley made progress last year on Mr. Gorman's plan to
transform the firm into one less dependent on trading businesses
whose volatile nature has left many investors wary. It posted
profits in all four quarters, and revenue jumped 20%.
Mr. Gorman's compensation fell within the pay range five other
large U.S. banks had awarded his counterparts. Goldman Sachs Group
Inc.'s Lloyd Blankfein led the pack with an estimated $23 million
in salary and bonus, followed by J.P. Morgan Chase & Co.
Chairman and Chief Executive James Dimon, who got $20 million.
Wells Fargo & Co.'s John Stumpf received $19.3 million, while
Citigroup Inc. CEO Michael Corbat and Bank of America Corp.'s Brian
Moynihan each tallied about $14 million.
Under the Securities and Exchange Commission's methodology,
which measures how much Mr. Gorman actually received during 2013,
the pay for the Morgan Stanley chief stood at $14.4 million, up
from the $10.7 million he earned in 2012.
Morgan Stanley's 2013 results were driven in part by the firm's
move to buy out Citigroup Inc.'s remaining stake in the two banks'
wealth-management joint venture, Morgan Stanley Smith Barney.
Morgan Stanley also repurchased its own stock for the first time
since the financial crisis. The firm's shares climbed 64% in 2013,
their best year since 2009.
"Getting Smith Barney has been monumental," said Mendon Capital
Advisors President Anton Schutz, who is considering buying Morgan
Stanley shares should the price decline. "It's created a less-risky
company. They still have a long ways to go on the capital-markets
side, but the retail brokerage is doing what it's supposed to."
On Wednesday, Morgan Stanley won the Federal Reserve's approval
to double its stock-buyback plan this year and raise its quarterly
dividend--another first since the crisis.
The buyback and other moves made by Mr. Gorman should help the
firm boost its returns. The firm's return on equity, an important
measure of the firm's profitability, stood at roughly 5% in
2013--less than half the 11% posted by rival Goldman Sachs. But in
announcing Morgan Stanley's full-year results in January, Mr.
Gorman laid out his plan for returns of 10%.
After years of focusing on deferred stock pay as compensation,
Morgan Stanley turned more to cash in 2013. Mr. Gorman received a
2013 salary of $1.5 million, up from $800,000 a year earlier. He
received a cash bonus of $316,000, his first cash payout since
2010. The year-end bonus also included shares valued at $5.09
million, and deferred cash of $5.09 million.
Mr. Gorman's pay raise follows two straight declines. He
received $10.5 million for his 2011 performance and $14 million for
2010, when he succeeded John Mack as CEO.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires