Morgan Stanley CEO Gets 7% Raise; Goldman Trims Stock-Pay for Some Executives -- Update
January 20 2017 - 6:09PM
Dow Jones News
By Liz Hoffman
Morgan Stanley gave its chairman and CEO, James Gorman, a 7%
raise for 2016, while Goldman Sachs Group Inc. cut stock awards for
several executives but didn't disclose compensation for its top
executive Lloyd Blankfein.
Mr. Gorman received a pay package valued at $22.5 million for
his work in 2016, up from $21 million the previous year, according
to a spokesman for the New York firm. The 2016 haul included a $5
million stock award disclosed in a filing Friday afternoon and a
salary of $1.5 million. The details of the remainder of Mr.
Gorman's incentive-based compensation are expected to be disclosed
in coming months.
Goldman shareholders won't get a picture Friday of whether Mr.
Blankfein beat his $23 million haul from 2015 until later this
spring. A person familiar with the matter said the bank wouldn't be
making year-end equity disclosures on Friday for Mr. Blankfein or
Chief Financial Officer Harvey Schwartz, who made $20.5 million in
2015.
Morgan Stanley reported a $6 billion profit on $34.6 billion in
revenue for the year, both down about 1% from 2015. But its shares
rose 33% in 2016, with most of the gains coming since the November
presidential election. Bank stocks have soared as investors bet on
lower taxes and faster economic growth under President Donald
Trump.
Mr. Gorman has set more public targets than other Wall Street
CEOs and made some progress toward meeting them in 2016.
The firm strung together three quarters of $1 billion revenues
in its debt-trading business, a longtime trouble spot that Mr.
Gorman's top deputy, former trading chief Colm Kelleher, has sought
to overhaul.
Wealth-management assets and loans continued to grow.
But Morgan Stanley still hasn't hit a 10% return on equity, a
key profitability goal. It ended the year with an ROE of 8%.
Mr. Kelleher received a $2.4 million grant, down from 2015.
Overall compensation for Mr. Kelleher, who became Mr. Gorman's sole
No. 2 a year ago, will be higher than in 2015, a person familiar
with the matter said.
Mr. Gorman's restricted shares valued at $5 million represent an
increase from his $4.6 million stock bonus a year ago. His cash
bonus and other long-term incentives will be disclosed in the
bank's proxy statement this spring.
At Goldman, the entire stock piece of the top executives' 2016
pay may be tied to how the company does over the next few years.
Such performance-based compensation doesn't have to be disclosed
until company's annual proxy statement.
Goldman in 2015 began tying a portion of top executives' pay to
ROE targets, saying it had heard from shareholders that they wanted
officials' fortunes more closely tied to that of investors.
In order for Mr. Blankfein and other top executives to receive
all of their stock awards, they will need to keep the firm's
average ROE above 11% between 2016 and 2018. The firm didn't clear
that bar in 2015 or 2016.
Also missing from Friday's disclosures was Gary Cohn, who left
as president and chief operating officer at year-end for a senior
economic-policy job in the Trump White House.
Stock bonuses fell for several executives for whom Goldman did
make disclosures, including general counsel Greg Palm,
human-resources head Edith Cooper and accounting chief Sarah Smith,
who will soon become the firm's head of compliance. Stock awards,
which typically make up about half of compensation among Goldman's
top brass, were down about 6% on average.
Goldman's 2016 revenue fell 9% from a year earlier, though
profits rose over 2015, when the bank set aside billions of dollars
to pay a mortgage settlement with the government.
David Solomon, the senior investment banker who was recently
named co-president and co-COO, received $9.8 million worth of
shares, using Thursday's closing price. His pay last year wasn't
disclosed.
His co-president and co-COO, Mr. Schwartz, also disclosed in a
filing that he sold $5.8 million worth of stock Thursday as part of
a prescheduled plan.
Pay at the upper echelons of Goldman has been fairly flat in
recent years, with Mr. Blankfein out-earning his top lieutenants by
relatively small margins.
Write to Liz Hoffman at liz.hoffman@wsj.com
(END) Dow Jones Newswires
January 20, 2017 17:54 ET (22:54 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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