By Justin Baer
Morgan Stanley paid its top executive $22.5 million for his work
in 2014, a 25% raise from a year earlier.
James Gorman, chairman and chief executive, received an annual
salary of $1.5 million, a cash and stock bonus of $14.5 million and
longer-term incentive pay valued at up to $6.5 million, Morgan
Stanley said Wednesday in a regulatory filing.
The pay package capped Mr. Gorman's most successful, and
lucrative, year in his five as CEO. The 56-year-old executive's
turnaround plan gained steam, lifting profits and the firm's stock
price. Revenue in 2014 rose 5.7%, to $34.3 billion, its highest
annual tally since Mr. Gorman became CEO in 2010. Morgan Stanley
also finished in the black for a second consecutive year and last
month won the Federal Reserve's approval to buy back more than $3
billion in stock.
Mr. Gorman had received $18 million for his 2013 performance and
$9.75 million after the firm posted a 2012 loss.
The latest increase has helped narrow the pay gap with his
counterpart at Morgan Stanley's longtime rival, Goldman Sachs Group
Inc. Goldman's chairman and chief executive, Lloyd Blankfein
received about $24 million in salary and bonus in 2014, though any
long-term incentive awards he received won't be disclosed until
Goldman unveils its annual proxy statement.
Including Mr. Gorman's long-term awards, which pay out based on
how Morgan Stanley and its shares perform over the next three
years, Mr. Gorman appears poised to earn more than any of his other
competitors.
In 2014, James Dimon, J.P. Morgan Chase & Co.'s chairman and
CEO, received $20 million. Wells Fargo & Co. paid its top
executive, John Stumpf, $19.3 million. Citigroup Inc.'s Michael
Corbat and Bank of America Corp. CEO Brian Moynihan each were
awarded $13 million.
To collect the $6.5 million in long-term awards, Mr. Gorman will
have to lift Morgan Stanley's average return on equity to at least
10%, a goal that has eluded him so far.
Goldman paid Mr. Blankfein $23 million in salary and bonus for
his 2013 performance and granted him long-term awards that could
bring in an additional $6 million if he hits certain targets over
the next several years.
Meanwhile, Morgan Stanley announced in its filing the nomination
of a new director, Perry M. Traquina. Mr. Traquina, 58, was
formerly chairman, CEO and managing partner of Wellington
Management Co., an asset-management firm.
Morgan Stanley's other top executives also received pay
increases this past year.
Ruth Porat, who recently announced she would be leaving as
finance chief to take the same role at Google Inc., received $13
million, including salary, bonus and long-term incentive pay. A
Morgan Stanley spokesman declined to say how the firm would treat
Ms. Porat's deferred pay in light of her departure.
Greg Fleming, who runs Morgan Stanley's wealth and
asset-management businesses, earned a total pay package of $16
million. Investment banking and trading chief Colm Kelleher
received $18 million, including a $2 million supplementary award
for his role as CEO of Morgan Stanley's international arm.
In setting the CEO's pay, Morgan Stanley directors said they
considered Mr. Gorman's "efforts in articulating and executing a
companywide strategy to enhance profitability, share price and
market capitalization; maintaining sound risk management and
controls; and promoting cultural cohesion and engagement among
employees."
Morgan Stanley's board recommended that investors vote against a
trio of proposals by fellow shareholders. One urged Morgan Stanley
to disclose its lobbying expenses annually, while another ordered a
change in the way the firm counts proxy votes. The third called for
preventing executives from speeding up the vesting period for stock
awards should they leave the firm for a government post.
Emily Glazer contributed to this article.
Write to Justin Baer at justin.baer@wsj.com
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