Morgan Stanley CEO Gorman Gets 25% Pay Raise for 2014--3nd Update

By Justin Baer 

Morgan Stanley paid its top executive $22.5 million for his work in 2014, a 25% raise from a year earlier.

James Gorman, chairman and chief executive, received an annual salary of $1.5 million, a cash and stock bonus of $14.5 million and longer-term incentive pay valued at up to $6.5 million, Morgan Stanley said Wednesday in a regulatory filing.

The pay package capped Mr. Gorman's most successful, and lucrative, year in his five as CEO. The 56-year-old executive's turnaround plan gained steam, lifting profits and the firm's stock price. Revenue in 2014 rose 5.7%, to $34.3 billion, its highest annual tally since Mr. Gorman became CEO in 2010. Morgan Stanley also finished in the black for a second consecutive year and last month won the Federal Reserve's approval to buy back more than $3 billion in stock.

Mr. Gorman had received $18 million for his 2013 performance and $9.75 million after the firm posted a 2012 loss.

The latest increase has helped narrow the pay gap with his counterpart at Morgan Stanley's longtime rival, Goldman Sachs Group Inc. Goldman's chairman and chief executive, Lloyd Blankfein received about $24 million in salary and bonus in 2014, though any long-term incentive awards he received won't be disclosed until Goldman unveils its annual proxy statement.

Including Mr. Gorman's long-term awards, which pay out based on how Morgan Stanley and its shares perform over the next three years, Mr. Gorman appears poised to earn more than any of his other competitors.

In 2014, James Dimon, J.P. Morgan Chase & Co.'s chairman and CEO, received $20 million. Wells Fargo & Co. paid its top executive, John Stumpf, $19.3 million. Citigroup Inc.'s Michael Corbat and Bank of America Corp. CEO Brian Moynihan each were awarded $13 million.

To collect the $6.5 million in long-term awards, Mr. Gorman will have to lift Morgan Stanley's average return on equity to at least 10%, a goal that has eluded him so far.

Goldman paid Mr. Blankfein $23 million in salary and bonus for his 2013 performance and granted him long-term awards that could bring in an additional $6 million if he hits certain targets over the next several years.

Meanwhile, Morgan Stanley announced in its filing the nomination of a new director, Perry M. Traquina. Mr. Traquina, 58, was formerly chairman, CEO and managing partner of Wellington Management Co., an asset-management firm.

Morgan Stanley's other top executives also received pay increases this past year.

Ruth Porat, who recently announced she would be leaving as finance chief to take the same role at Google Inc., received $13 million, including salary, bonus and long-term incentive pay. A Morgan Stanley spokesman declined to say how the firm would treat Ms. Porat's deferred pay in light of her departure.

Greg Fleming, who runs Morgan Stanley's wealth and asset-management businesses, earned a total pay package of $16 million. Investment banking and trading chief Colm Kelleher received $18 million, including a $2 million supplementary award for his role as CEO of Morgan Stanley's international arm.

In setting the CEO's pay, Morgan Stanley directors said they considered Mr. Gorman's "efforts in articulating and executing a companywide strategy to enhance profitability, share price and market capitalization; maintaining sound risk management and controls; and promoting cultural cohesion and engagement among employees."

Morgan Stanley's board recommended that investors vote against a trio of proposals by fellow shareholders. One urged Morgan Stanley to disclose its lobbying expenses annually, while another ordered a change in the way the firm counts proxy votes. The third called for preventing executives from speeding up the vesting period for stock awards should they leave the firm for a government post.

Emily Glazer contributed to this article.

Write to Justin Baer at [e-mail]

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