Morgan Stanley CEO Gorman paid $13 million in 2011

AP News
Posted: Apr 05, 2012 11:44 AM
Morgan Stanley CEO Gorman paid $13 million in 2011

Morgan Stanley cut CEO James Gorman's pay by 15 percent last year to $13 million, according to an analysis by The Associated Press.

The New York investment bank said in a regulatory filing Thursday that Gorman's compensation included a salary of $800,000, a deferred cash bonus of $2.7 million, stock awards worth $5.9 million and stock options worth $3.5 million and $9,800 in a company match to his retirement plan.

Except for his salary, all of Gorman's compensation, including his bonus, was in deferred compensation.

For the first time, all top executives at Morgan Stanley, can have their deferred compensation taken away if they don't meet certain performance benchmarks or if the bank suffers a substantial loss as a result of either a trading strategy or investment decision they took.

Gorman's drop in pay reflected Morgan Stanley's tough year. The bank struggled along with much of Wall Street as revenue from trading stocks and bonds fell. Bank clients stayed away, first because of the uncertainty from the surprise downgrade of U.S. debt last summer, and after that the volatility in markets as European countries struggled to make payments tied to their massive debts.

Morgan Stanley's stock dropped 44 percent last year. It reported a 19 percent drop in earnings to $4.6 billion, which included a fourth-quarter loss of $275 million, its first since early 2009.

Like its peers, Morgan Stanley has been trimming expenses as Wall Street readjusts to new regulatory requirements that have forced it to reduce or sell profitable business units like hedge funds. Morgan Stanley shed about 700 employees last year and cut 1,600 people in the first quarter this year, bringing its total workforce to 60,000.

The bank has said it is examining expenses rigorously, cutting back on travel and looking at all costs, from Bloomberg terminals to consultants. It's also considering restructuring plans that could include outsourcing some technology functions or consolidating legal units.

The AP's executive pay calculation aims to isolate the value the company's board placed on the CEO's total compensation package. The figure includes salary, bonus, incentives, perks and the estimated value of stock options and awards.