WSJ: Morgan Stanley looking to overhaul pay plan

AP News
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Posted: Dec 29, 2009 11:18 AM

Morgan Stanley is considering the way it compensates its top executives, looking to defer more pay and benchmark salaries against rivals, The Wall Street Journal reported Monday, citing people familiar with the matter.

The move reflects Wall Street's effort to minimize criticism of its pay practices and at the same time maintain its executive talent, the Journal reported.

Earlier this month, Goldman Sachs Group Inc. said its top executives will not receive cash bonuses this year.

Calls to Morgan Stanley for comment were not immediately returned.

According to the report, Morgan Stanley's compensation committee has met several times in recent weeks to discuss pay plans.

The New York investment bank may decide to pay senior executives about one quarter of their 2009 pay in cash, with the rest coming as deferred stock, the Journal reported.

Another plan being considered would have most of the top 30 Morgan executives submit 65 percent or more of their pay to "clawbacks," where they would have to return money in the event of future losses.

Morgan Stanley could also determine that 20 percent of one's total compensation would come in shares awarded based on the company's share price compared with rival firm's share prices, the Journal said.

Earlier this month, outgoing Morgan Stanley Chairman and CEO John Mack said he would not receive his bonus for the year, citing the "unprecedented environment and the extraordinary financial support provided to our industry" in a memo to employees. It would mark the third year that Mack won't accept a bonus.

Mack will step down as CEO on Jan. 1, but will remain at the company as chairman. He is being succeeded by co-president James Gorman. Gorman will help make final decisions on the compensation plans, the Journal said.

Shares of Morgan Stanley rose 12 cents to $29.41 in late morning trading.