Morgan Stanley Revamps Executive Pay Plan
The investment bank is the latest Wall Street firm to bow to increasing pressure from shareholders and Washington to scale back lavish compensation packages as the country digs out of a prolonged recession – one which the financial industry shoulders much of the blame for.
Earlier this month, Goldman Sachs announced its top 30 executives and instead receive deferred stock compensation.
Morgan Stanley won't go that far, offering top executives around 25 percent of their pay in cash and the rest in deferred stock, a source familiar with the matter told the Journal.
According to the report, the firm's compensation committee has been meeting over the last several weeks to decide how best to navigate what has become a hot-button issue. One plan under consideration would require Morgan's top 30 executives to defer at least 65 percent of their pay, or subject it to "clawbacks" – paying it back in the event of future losses.
Twenty percent of pay would also be tied to the company's share price, as compared with share prices of rival firms, and Morgan Stanley's return on equity set against certain benchmarks.
A final decision on what Morgan Stanley's compensation plan will look like may come as soon as next month.