Top Investment Bank CEO’s 2019 Salary Drops 7% While Company Boasts Record-Setting Profits

Following a move to reduce bonuses staff-wide, Morgan Stanley CEO James Gorman’s total pay in 2019 reportedly fell 7% from 2018.

Gorman, 61, received total compensation last year of $27 million, for a period in which the company saw massive profit spikes under his leadership.

Typically, high profits and growth would result in companies giving executives raises and higher bonuses. In the case of Morgan Stanley, the financial institution’s board had reportedly decided to reduce bonuses in 2019, in addition to cutting staff to offset a 7% increase in compensation expenses. The company reportedly paid $172 million in severance packages fired employees. The company had previously announced intentions to cut 1,500 employees from its global workforce.

The board of Morgan Stanley commended Gorman’s work in 2019, calling it “outstanding” and praising the bank’s success under his stewardship. The institution posted $2.09 billion in the fourth quarter of 2019, a 46% increase. Morgan Stanley’s total revenue for the quarter increased by 27% to $10.86 billion, well surpassing the bank’s $9.72 billion earlier estimate.

“We delivered strong quarterly earnings across all of our businesses,” Gorman said in a statement. “Firmwide revenues were over $10 billion for the fourth consecutive quarter, resulting in record full-year revenues and net income. This consistent performance met all of our stated performance targets.”

In a tweet, Morgan Stanley confirmed that its full-year net revenue for 2019 was a record-setting $41.4 billion, with a net income of $9 billion.

$MS 2019 earnings: Record full year net revenues of $41.4 billion and record net income of $9.0 billion; earnings per diluted share of $5.19 https://t.co/mxqnNYLD5M
— Morgan Stanley (@MorganStanley) January 16, 2020

Gorman’s total compensation breaks down into four parts, including a $1.5 million base salary, a $6.375 million cash bonus, a $6.375 million deferred equity award, and a $12.75 million performance-vested equity award.

The Morgan Stanley board has required that 75% of the CEO’s incentive pay be deferred over a three-year period.

All of that payment must also be made in the form of equity options.