Morgan Stanley paid chief executive James Gorman $31.5 million for his work in 2022, down 10 percent from $35 million a year earlier after the Wall Street bank reported lower profits and losses.
The smaller pay package means longtime JPMorgan Chase CEO Jamie Dimon is getting Gorman for the first time since 2019. JPMorgan on Thursday said Dimon will be paid $34.5 million in 2022, unchanged from the previous year.
Goldman Sachs, whose CEO David Solomon last year was the highest-paid Wall Street bank boss along with Gorman at $35 million, has not announced its executive salary plan for 2022.
In a regulatory filing on Friday, Morgan Stanley said Gorman earned a base salary of $1.5m, a cash bonus of $7.5m, $4.5m in deferred equity and a performance-based stock bonus worth $18m.
Morgan Stanley also announced that its top six executives sold about $54 million in company stock this week. This includes sales worth $ 24 million from Gorman and $ 13 million from Ted Pick, co-president of the bank and one of the leading candidates to eventually follow Gorman as CEO.
In 2022, Morgan Stanley’s profits fell 10 percent annually, while net income fell 27 percent to $11 billion. The bank reported a real return on common equity, a measure of profitability, of 15.3 percent, below its long-term target of at least 20 percent.
Morgan Stanley said that the board of directors, when determining Gorman’s salary, considered that “in a challenging economic and market environment, the firm’s performance for 2022 is not as strong as the previous year when the company achieved record financial performance”.
The bank’s spending on salaries and benefits for employees in 2022 will total $23bn, down 6 percent annually. This is despite a 10 percent increase in the workforce to around 82,000 employees.
Amid falling profits, triggered by a broad slowdown in dealmaking activity, Morgan Stanley in December laid off about 1,800 employees, or 2 percent of its workforce.
Since becoming CEO in 2010, investors have encouraged Gorman’s strategy to expand Morgan Stanley’s historic investment banking and trading power and invest in more stable businesses such as asset management and wealth.
This pivot has helped open a valuation gap at Goldman, a longtime rival that still makes profits from trading and investment banking.