With all eyes focused on Washington, on a Friday evening, Morgan Stanley just revealed that 58-year-old Morgan Stanley CEO James "don't call me Jim" Gorman was paid $22.5 million. Despite a notable drop in earnings from expectations and a focus on cost-cutting, Gorman got a 7.1% pay rise (almost double that of Jamie Dimon).
Analysts expected Morgan Stanley to earn $3.155 in 2016. By the end of 2016 the firm realized just $2.756… but thanks to Trump's election victory, the stock soared…
As Bloomberg notes, Gorman received $1.5 million in salary as well as restricted stock units, Mark Lake, a company spokesman, said Friday. The restricted stock is valued at about $5 million based on Wednesday’s closing price. The New York-based firm will report other components of Gorman’s pay package in coming months.
Gorman’s pay for 2015 was $21 million, down 6.7 percent from the prior year. He typically receives at least half of his compensation in the form of restricted shares. Some vest over time depending on the bank’s return on equity and stock performance relative to the S&P Financials Index, while the remainder vests over three years regardless of financial results. Part of his cash payouts also have been deferred over three years.
The CEO in November made his first sale of Morgan Stanley stock since he joined the bank in 2006. He sold shares and exercised stock options for a net gain of about $10 million, regulatory filings show.
Gorman's pay raise comes as the firm has shifted its focus toward wealth management with a $1 billion expense-reduction program, improving the wealth unit's profit margin and increasing shareholder capital return are key in its effort to improve return on equity.
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