Morgan Stanley's Gorman Made $27 Million in 2017

By Liz Hoffman 

Morgan Stanley Chief Executive James Gorman made $27 million last year, a 20% raise that sends a strong signal from the firm's the board that it approves the progress he has made in reviving the once struggling Wall Street firm.

Mr. Gorman's haul included a $1.5 million salary, a $1.2 million stock award, a $5.6 million cash bonus and deferred cash and long-term incentive pay -- whose value depends ultimately on how Morgan Stanley performs -- of about $19 million, according to a securities filing Friday afternoon and a person familiar with the matter.

The raise makes Mr. Gorman, who runs the smallest of the big six U.S. banks, one of the highest-paid CEOs on Wall Street. On Thursday, JPMorgan Chase & Co., three times Morgan Stanley's size, said it boosted Chief Executive James Dimon's pay to $29.5 million last year.

Morgan Stanley's vote of confidence in Mr. Gorman recognizes the strides the firm has made since the executive took over in 2010. At that time, Morgan Stanley had been humbled by the financial crisis and was strategically adrift.

Mr. Gorman's decision to de-emphasize trading and embrace wealth management -- a stabler, simpler and less risky business -- has paid off, producing steady growth.

Morgan Stanley's 2017 revenue rose 10% from a year ago, and the firm finally hit a goal of 9% return on equity. It beat other stated targets, including profitability in its wealth-management division, and brought a trading division once prone to blowups under control.

"Mr. Gorman's compensation reflects the strong performance of Morgan Stanley in 2017," a spokesman for the firm said.

Still, the size of his pay package -- and what it says about the board's confidence in him -- is likely to raise eyebrows, given Morgan Stanley's relatively smaller size and the fact that its return on equity still lags peers.

One thing likely to keep Mr. Gorman focused on improvement: half of his total pay, some $13 million, is based on the firm's performance. That is up from about 30% in his 2016 compensation package.

Write to Liz Hoffman at [e-mail]

(END) Dow Jones Newswires

January 19, 2018 19:12 ET (00:12 GMT)

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