Morgan Stanley CEO James P. Gorman Awarded $37 Million for Exceptional Performance

by Warren Seah

Morgan Stanley, one of the most renowned investment banks, has awarded its Chief Executive Officer James P. Gorman a staggering $37 million. The compensation committee at Morgan Stanley acknowledged Gorman’s exceptional performance and leadership, resulting in this significant payment.

Exceptional Performance Recognized

Gorman’s outstanding execution of CEO succession and the smooth transition of leadership were key factors in his recognition. The compensation committee praised his exceptional performance, leading to this substantial compensation. In addition to these achievements, Gorman played a vital role in resolving legal and regulatory matters.

A New Era at Morgan Stanley

After serving as Chief Executive for 14 years, Gorman stepped into the role of Executive Chair on January 1st. Ted Pick has taken over as the new Chief Executive, while Andy Saperstein and Dan Simkowitz now serve as co-presidents, having previously been considered for the top position.

Positive Market Response

Following this news, Morgan Stanley’s stock experienced a 1.5% increase on Monday. Despite a 10.9% decline in the past year, the bank has fared well compared to the S&P 500 SPX, which has seen a 21% rise during the same period.

Also read: Morgan Stanley hit with $249 million fine for block-trading fraud

Morgan Stanley CEO Reshapes Firm for Long-Term Growth

During his 14-year tenure as CEO, Mr. Gorman has successfully reshaped Morgan Stanley into a stronger and more balanced institution, setting it up for long-term growth, according to the board. Despite a challenging market and macro environment in 2023, the firm’s business model performed as intended.

In recognition of his exceptional performance, the board had set a target salary range for Gorman between $20 million and $40 million. In 2022, he earned $31.5 million, and in 2021, he earned $35 million.

Key milestones achieved by Gorman in 2023 include a remarkable 14% shareholder return. Furthermore, Morgan Stanley’s wealth-management unit accounted for over 60% of the firm’s pretax profits, a significant increase from the 30% it represented in 2010 when Gorman assumed the role of chief executive.

The bank also achieved an impressive 12.8% return on tangible common equity amidst a mixed backdrop and numerous headwinds.

To align the base salary of Pick, who succeeded Gorman as chief executive, with his predecessor’s base salary during his tenure, the board approved a $1.5 million base salary for Pick.

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