While we're all looking forward to the next pay raise, for some it ends up being a lot larger than others: Morgan Stanley (MS) CEO James Gorman's just saw his salary raised to $35 million.
As part of his annual pay hike, 63-year-old Gorman will receive a pay raise of 6% — in 2020, the top executive's salary was reported to be $33 million.
The new number, which was reported in a regulatory filing first uncovered by Reuters, takes into account an annual base salary of $1.5 million, a cash bonus of $8.38 million, a deferred equity award of $5.03 million and a whopping performance-based award of $20.1 million.
The Bonus Is How High?
Brokers at firms like Morgan Stanley are known to rake in significant bonuses based on the amount of clients they bring in — recent numbers estimated that the average bonus bankers and traders received last year jumped by between 30% to 35% between 2021 and 2020.
Gorman, however, saw an even bigger boost to his salary last year when, in 2020, the bank gave him a compensation bonus that took his salary from $27 million to $33 million.
He started as CEO of the firm in 2010 and has been on a mission to boost its financial performance through several global expansions and acquisitions; the bonus is tied to Morgan Stanley's net income rising from $11 billion to $15 billion a year in 2021 under his leadership.
In the latest earnings report, the firm cited strong performance in its core wealth management business as the reason for strong numbers: it earned $3.7 billion, or $2.01 a share, compared to $3.4 billion in the same quarter last year.
Even prior to the latest raise, Gorman was the highest-paid bank executive in America; JPMorgan Chase JP Morgan Chase CEO Jamie Dimon's salary was also raised this year and is now just behind at $34.5 million.
Pandemic-Led Year And Apologies
Amid growing vaccination rates and lower case counts in the summer, the Australian-born Gorman did not institute a mandatory return to the office but did everything else possible to command it from Morgan Stanley employees.
"[By] Labor Day, I'll be very disappointed if people haven’t found their way into the office, and then we’ll have a different kind of conversation," he said during an employee webcast in June.
When case counts started rising again in the fall, Gorman had to walk back his past statements and admit that he "was wrong on this" in a CNBC interview.
In the same earnings call earlier this week, Gorman said that he would not be retiring immediately but, after twelve years at the helm, starting to consider replacements.
"I'm not leaving now and I'm not going to be here in five years," Gorman said to those tuning in.
