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Morgan Stanley chief executive's total 2019 pay falls 7% to US$27m

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Morgan Stanley chief executive James Gorman is receiving US$27 million in total compensation in 2019, 7 per cent less than what he got the year before, the company said in a filing on Friday, reflecting a reduction of bonuses staff-wide.

[NEW YORK] Morgan Stanley chief executive James Gorman is receiving US$27 million in total compensation in 2019, 7 per cent less than what he got the year before, the company said in a filing on Friday, reflecting a reduction of bonuses staff-wide.

The board called the 61-year-old's performance in the year "outstanding" and acknowledged "the firm's strong financial performance."

The bank said in its fourth-quarter earnings on Thursday that it was lowering 2019 bonuses staff-wide in an effort to offset a 7 per cent increase in other compensation expenses, however.

Morgan Stanley paid US$172 million in severance packages to terminated employees, many of whom worked at the investment bank and trading business, according to the firm's fourth-quarter earnings report. The bank said in December that it would cut about 1,500 employees, or roughly 2 per cent of its global workforce.

The bank's overall reported profit jumped 46 per cent to US$2.09 billion in 2019 compared to 2018, which pushed executives to raise the bar for its performance goals. The bank said on Thursday that in the next two years it will aim to reduce expenses further, and increase returns on equity and profits from its wealth management business.

Mr Gorman's compensation is comprised of four parts: a base salary of US$1.5 million; a cash bonus of US$6.375 million; a deferred equity award of US$6.375 million; and a performance-vested equity award of US$12.75 million.

The board again required that 75 per cent of Mr Gorman's incentive compensation be deferred over three years subject to a claw-back, and for all of that compensation to be paid in the form of equity in the company. 

REUTERS