Morgan Stanley CEO gets pay worth $15.2 million

AP News
Posted: Apr 14, 2011 5:59 PM

James Gorman, the CEO of Morgan Stanley, received compensation valued at $15.2 million last year, up from $6.5 million in 2009, according to an Associated Press analysis of data filed with regulators Thursday.

Gorman got a salary of $800,000, a cash bonus of $3.9 million, and stock awards valued at $10.2 million. In 2009, Gorman had a salary of $734,247 and cash bonus of $5.7 million.

The board of directors noted in the filing that Gorman's cash bonus fell by 32 percent because "the company did not fully meet certain financial priorities for the year."

In 2010, Morgan Stanley's net income totaled $3.6 billion, compared to a loss of $907 million in 2009. However, its stock fell 8.1 percent last year.

Morgan Stanley last year reduced the amount of cash bonuses it pays senior executives and increased the amount it pays in deferred compensation. The average amount of deferred compensation increased to 60 percent in 2010, from 40 percent in 2009.

The company also noted that it can reclaim a portion of year-end compensation under a "clawback" provision in which a portion of the compensation can be canceled if the financial results are restated, or if there is a significant financial loss or any other reputational harm to the company.

The Associated Press formula calculates an executive's total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.

The value that a company assigned to an executive's stock and option awards for 2010 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company's stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.