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Your Bonus Had To Die So That James Gorman’s Could Live

Congrats to Jim Gorman on a strong quarter...wait, really?
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There were a lot of cutbacks at Morgan Stanley this year: Layoffs, pay cuts, shrinking bonuses, more layoffs.

Even if they were conducted with slightly more humanity than in the past, and with some linguistic innovation, to boot, such slashing is hard work. Luckily, it paid off.

Last year, Gorman moved the firm closer to financial targets by cutting expenses, improving bond-trading results and boosting companywide returns. Return on equity climbed to 8 percent, almost reaching the 9 percent to 11 percent goal for the end of this year. The stock posted its biggest annual gain since 2013, with much of it happening after Donald Trump’s election as U.S. president spurred investor hopes for higher interest rates, lower taxes and lighter regulation.

And that all means that at least one bonus at the House of Morgan not only survived, but thrived: Especially for the big boss, James Gorman, who received a 7.1% pat on the head from the board for his troubles.

Gorman, 58, received restricted stock valued at about $5 million based on Wednesday’s closing price, according to a regulatory filing Friday. His $22.5 million package also included $1.5 million in salary, said Mark Lake, a company spokesman….

Gorman’s pay for 2015 was $21 million, down 6.7 percent from the prior year.

Make that two: Gorman’s deputy, Colm Kelleher, has done an admirable job resurrecting the bank’s fixed-income business, and so he gets to have several dozen laid off peoples’ bonuses, too.

Mr. Kelleher received a $2.4 million grant, down from 2015. Overall compensation for Mr. Kelleher, who became Mr. Gorman’s sole No. 2 a year ago, will be higher than in 2015, a person familiar with the matter said.

Morgan Stanley Lifts Gorman’s 2016 Pay 7.1% to $22.5 Million [Bloomberg]
Morgan Stanley CEO Gets 7% Raise; Goldman Trims Stock-Pay for Some Executives [WSJ]

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