- Morgan Stanley gave CEO James Gorman a 22% compensation boost in 2020, to $33 million from $27 million, the bank reported in a filing Friday. With that jump, he passes JPMorgan Chase CEO Jamie Dimon among the best-paid bank CEOs. Dimon's $31.5 million in 2020 compensation remained unchanged from the previous year, JPMorgan reported Thursday.
- Gorman's compensation breaks down to a $1.5 million salary, a $7.875 million cash bonus, a $7.875 million deferred equity award and a $15.75 million equity award that converts to shares only if the bank meets its board's targets for return on tangible common equity (ROTCE) and shareholder return over three years.
- The boost also comes a year after Gorman took a 7% pay cut — despite a 46% increase in profit in 2019 — to mirror a companywide reduction of bonuses.
On acquisitions alone, Morgan Stanley had a remarkable 2020. In February, it engineered the $13 billion purchase of E*Trade — the largest such deal since the 2007-08 financial crisis — then followed it up in October with a $7 billion acquisition of investment management firm Eaton Vance. The former deal added 5.2 million client accounts to Morgan Stanley's rolls, carrying $360 billion in assets. The Eaton Vance acquisition nearly doubled — to $1.2 trillion — Morgan Stanley's assets under management.
Morgan Stanley also saw its third consecutive year of record earnings, according to Bloomberg. Full-year revenue jumped 16% to $48.2 billion. Profit rose 22% to $11.0 billion. And ROTCE — one of the metrics upon which some of Gorman's compensation rides — grew to 15.2% from 13.4%, according to a quarterly earnings statement the bank released Wednesday.
On a more granular level, net profits soared 51% in the fourth quarter to $3.4 billion. Trading revenues jumped 32% during the same period, and investment banking fees rose 46%.
"Our firm is at an inflection point and the next decade will be characterized by growth," Gorman said last week in a call with analysts, according to the Financial Times.
Morgan Stanley stock jumped 34% in 2020 — more than twice the 14% gain its rival Goldman Sachs saw, the Financial Times reported. That pushed Morgan Stanley's market value past $130 billion, a 30% premium over Goldman, according to Bloomberg.
Morgan Stanley is the second of the six largest U.S. banks to report CEO compensation this year. Behind Dimon's $31.5 million in 2019 were Goldman's David Solomon at $27.5 million, Bank of America's Brian Moynihan at $26.5 million and Citi's Michael Corbat at $24 million. Solomon's pay saw a 19.6% bump from 2018, as 2019 was his first full year leading Goldman Sachs.
Wells Fargo CEO Charlie Scharf took in $36.4 million in total compensation in 2019, according to S&P Global, although some of that comprises a "make-whole award" Wells offered him, intended to replace the value of equity compensation he would forfeit by vacating the top post at BNY Mellon.