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March 03, 2015 at 10:58 AM
Morgan Stanley (MS) leaders got performance-based stock awards Monday that have more than doubled in value since they were granted three years ago — the biggest payout yet under a bonus program adopted after the financial crisis.
Chief Executive Officer James Gorman’s receipt of 113,510 shares, disclosed in a filing, is about 6 percent more than what the board originally targeted, after the firm beat a goal for shareholder returns and missed one for profitability. Gorman’s shares were valued at $4.1 million on Monday, up from $1.94 million when they were awarded as part of a 2011 bonus.
Morgan Stanley’s stock produced a total return of 165 percent in the three years ended in 2014, surpassing the 101 percent in the Standard & Poor’s 500 Financials Index. Gorman helped boost the valuation by shrinking the fixed-income trading business and improving margins in the brokerage unit.
Getting Nothing
The bank’s managers got nothing from the program’s first awards after missing both minimums, with Gorman losing a grant originally worth $2.9 million. Last year, when the 2010 awards came due, the firm delivered 63 percent of the original amount. In that case, the bankers got no bonus linked to profitability, and 1.25 times their award tied to the stock’s return.
This time the executives benefited from changes made to the portion of the 2011 bonus linked to profitability. While the target was 10 percent, the minimum level needed to get a partial payout was lowered to 6 percent from 7.5 percent. The bank also added a clause in a filing that described the program, excluding items such as legal settlements that involved behavior before 2011.
