Morgan Stanley Gives Gorman $5.06 Million of Shares for 2013

Jan 23, 2014 8:02 pm ET

Jan. 24 (Bloomberg) -- Morgan Stanley Chairman and Chief Executive Officer James Gorman’s compensation package for last year includes a $5.06 million stock bonus that’s almost double his 2012 equity award.

Gorman, 55, will get 155,207 restricted shares, according to a filing yesterday with the U.S. Securities and Exchange Commission. That’s in addition to his $1.5 million salary, which the company almost doubled last year from a previous level of $800,000. The firm will disclose details about his cash bonus and long-term incentives later this year.

Morgan Stanley shares jumped 64 percent last year as it improved profit margins in the retail brokerage and generated the most equity-trading revenue since the financial crisis. Still, the bank had a 5 percent return on equity, unchanged from a year earlier and short of Gorman’s goal of 10 percent.

Gorman got a $6 million award for 2012 that included $2.63 million in stock options and $2.58 million in deferred cash in addition to his $800,000 salary. He also received a $3.75 million long-term incentive dependent on the bank hitting performance targets.

The value of Gorman’s 2013 stock awards is based on Morgan Stanley’s closing share price of $32.63 on Jan. 21.

The increase in stock awards shows Gorman may get his first boost in total compensation since taking over as CEO. After receiving $14 million for 2010, his pay dropped to $10.5 million for 2011 and $9.75 million for 2012.

Immediate Cash

He also will get his first immediate cash bonus in three years, according to a person briefed on the award. Morgan Stanley is increasing the amount of bonuses that top traders and bankers receive immediately, while cutting the portion of revenue set aside for pay in its institutional securities division.

The bank will defer 50 percent to 98 percent of bonuses for employees who have both total pay of at least $350,000 and incentive pay of $50,000, a person briefed on the matter said this month. Last year, that group had 100 percent of its bonuses deferred.

Morgan Stanley awarded Colm Kelleher, who runs the investment banking and trading division, shares with a total value of $4.37 million. Kelleher is based in London and must receive a minimum portion of his award in stock, per U.K. rules. Greg Fleming, who heads the brokerage and asset management businesses, received stock valued at $4.17 million.

Chief Financial Officer Ruth Porat got $3.36 million in shares, while Chief Operating Officer James Rosenthal received $2.87 million in shares.

Erskine Bowles, a director at the company since 2005, chairs the board’s compensation committee.

--Editors: David Scheer, Dan Reichl