Morgan Stanley's Executive Chairman, James Gorman, experienced a 17% increase in compensation during his final year as CEO, reaching $37 million for the fiscal year 2023. This marked a notable surge from the $31.5 million he received in 2022, as revealed in a filing by the bank on Friday. Notably, Gorman's pay stands out as the highest among major U.S. bank chiefs reported thus far for the year.
JPMorgan Chase CEO Jamie Dimon, for comparison, received $36 million for the same period, and further details regarding compensation from other rival banks are anticipated in the weeks to come.
The transition in leadership at Morgan Stanley occurred on January 1, with Gorman assuming the role of executive chairman and Ted Pick taking over as the new CEO. An interesting facet of Gorman's compensation is that three quarters of his performance bonus are disbursed in the form of equity and deferred over a three-year period.
The bank's board underscored Gorman's "outstanding performance," particularly commending his exemplary execution of the CEO succession process and leadership transition. Additionally, the board recognized Gorman's effective resolution of legal and regulatory matters, influencing the decision to augment his compensation.
Gorman's significant impact on Morgan Stanley is evident in his 14-year tenure at the helm. Credited with transforming the bank into a formidable wealth management entity, he also orchestrated a unique succession plan where Ted Pick assumed leadership alongside the retention of two other CEO candidates, Andy Saperstein and Dan Simkowitz, a rarity in the financial world.
The compensation committee, in justifying the pay increase, pointed to the remarkable total shareholder return of 14% in 2023 and the company's enhanced valuation since Gorman assumed the role of CEO.
Under Gorman's leadership, Morgan Stanley's stock witnessed a remarkable threefold increase, and the market capitalization surged from $40 billion to an impressive $153 billion.
The filing further stated, "Over his 14-year tenure as CEO and during 2023, Mr. Gorman reshaped the firm into a stronger and more balanced institution positioned for long-term growth." This transformation allowed Morgan Stanley's business model to thrive in the face of a challenging market and macroeconomic environment throughout 2023, according to the board.
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