8-KLeadership ChangesOther Events

MORGAN STANLEY 8-K Report, Executive Changes (Jan 19, 2024)

Filed January 19, 2024For Securities:MSMS-PKMS-POMS-PQMS-PAMS-PFMS-PIMS-PLMS-PPMS-PEMSTLW

Summary

Morgan Stanley filed an 8-K report on January 19, 2024, detailing the 2023 compensation for its former CEO and now Executive Chairman, James P. Gorman. The Compensation Committee determined Mr. Gorman's 2023 compensation at $37 million, acknowledging his outstanding performance, particularly in executing CEO succession, transitioning leadership, and resolving legal/regulatory matters. This compensation reflects a target range set at the beginning of the year, with a strong performance outcome. A significant portion of his bonus is deferred and equity-based, aligning his interests with shareholders over a three-year period. The report also highlights Morgan Stanley's strong 2023 performance under Mr. Gorman's leadership, including a 14% total shareholder return, $54.1 billion in net revenues, and $9.1 billion in net income. The shift towards Wealth and Investment Management contributing over 60% of pre-tax profit underscores a more balanced business model. Furthermore, the firm announced an increase in the base salary for the new CEO, Ted Pick, to $1.5 million, aligning it with Mr. Gorman's former CEO base salary.

Key Highlights

  • 1James P. Gorman's 2023 total compensation set at $37 million, reflecting strong performance and leadership transition.
  • 2Significant portion (75%) of Mr. Gorman's bonus is deferred over three years and is equity-based, with 60% performance-vested.
  • 3Morgan Stanley reported a 14% total shareholder return for 2023 and $9.1 billion in net income ($5.18 per diluted share).
  • 4Wealth and Investment Management businesses now contribute over 60% of the Firm's pre-tax profit, indicating a more balanced revenue mix.
  • 5Firm maintained a solid Common Equity Tier 1 Capital Ratio of 15.2% as of December 31, 2023.
  • 6New CEO Ted Pick's annual base salary increased to $1.5 million, effective January 1, 2024.

Frequently Asked Questions

James P. Gorman's total compensation for 2023 was set at $37 million. This was determined by the Compensation Committee based on his performance, including the successful CEO succession and transition, and resolution of legal and regulatory matters.

A significant portion of Mr. Gorman's compensation is structured to align with shareholder interests. 75% of his bonus is deferred over three years and subject to cancellation. Furthermore, 100% of his deferred bonus is delivered in the form of equity awards, and 60% of his bonus is performance-vested equity.

In 2023, Morgan Stanley achieved a total shareholder return of 14%, reported net revenues of $54.1 billion, and net income of $9.1 billion ($5.18 per diluted share). The Wealth and Investment Management businesses became the primary profit drivers, contributing over 60% of pre-tax profit.

Yes, the Compensation Committee approved a new annual base salary of $1.5 million for Ted Pick, the new CEO effective January 1, 2024. This salary is intended to align with the base salary Mr. Gorman previously received as CEO.