As Wall Street Rebounds, So Does Top Pay (but not mine)
22 Saturday Jan 2011
NEW YORK (Dow Jones)–Morgan Stanley paid employees an average of $256,595 each in 2010, an increase of 7.5% from 2009.
The firm set aside $16 billion for compensation and benefits last year, an overall 11% increase from the previous year as net revenue jumped 15%. Morgan Stanley has 62,542 employees, an increase of 3% from the prior year.
If the avg. salary at my co. rose 7.5% in ’10, then why (as a top performer) is mine effectively dropping by 3% for the 3rd year in a row?
Oh yeah, so execs can take home multi-million dollar bonuses. At least James Gorman (the CEO) is also taking another pay cut. That makes me feel a little better.
The financial crisis dragged sky-high pay packages for top Wall Street executives down to earth. Those days are ending.
… Morgan Stanley said Chief Executive James Gorman got about $7.4 million in restricted stock and options for 2010. That was down 12% from the $8.5 million stock award that he got a year earlier.
Total compensation for Mr. Gorman, who became CEO at the start of 2010, won’t be released until Morgan Stanley files a proxy statement for its annual shareholder meeting. The figure will be smaller than the $15 million in salary and bonus that Mr. Gorman got for 2009, according to a person familiar with the situation. More than 80% of Mr. Gorman’s pay will come in deferred instruments such as stocks, options and deferred cash awards that can be clawed back later, the person said. That means Mr. Gorman will get a cash bonus. He didn’t get one for 2009, and predecessor John Mack, now Morgan Stanley’s chairman, took no bonus for three consecutive years.
In Mr. Gorman’s first year as CEO, Morgan Stanley generated its highest net income and revenue since 2006, but the firm’s results and stock price still trailed other major banks, which explains why Mr. Gorman’s pay is down from last year despite his promotion to CEO from co-president.
Thursday, Morgan Stanley said its overall compensation and benefits for 2010 rose 11% to $16.05 billion from $14.43 billion in 2009. But Mr. Gorman has stressed discipline in pay, and compensation fell 2% in the unit that includes traders and investment bankers. The firm’s compensation as a percent of its revenue also fell from 2009.
I can understand “discipline in pay”, and agree that salaries at the top end of things have gotten way out of hand … but for those of us towards the bottom of the payscale, it’s still very frustrating, since a few million dollar pay cut for those at the top of the scale won’t have a significant impact on their standard of living, but a mere $5000 increase in my salary would go a long way towards making my life easier.
Oddly, today’s “Non-Sequitur”, by Wiley Miller seems to reflect my feelings on the issue exactly. Thanks to Dr. Cross for pointing it out to me.
For the record, Mr. Gorman only made somewhere between 250 and 300 times what I did last year … and I make about 75-80% below the so-called “average” employee.