Morgan Stanley pays James Gorman $33m for ‘record year’

Morgan Stanley’s chief executive, James Gorman, will receive $33m in total compensation for 2020, a 22 per cent increase over 2019’s $27m.

In a regulatory filing, the US investment bank said 2020 “was a record year for Morgan Stanley in many respects, both in terms of financial performance and in terms of advancement of the firm’s long-term strategic goals”, noting record revenue and pre-tax profit, as well as two major deals. 

Morgan Stanley’s stock rose 34 per cent last year, as market volatility boosted trading results and falling interest rates fuelled investment banking activity. Shares in its closest rival, Goldman Sachs, rose 14 per cent.

Mr Gorman’s pay package will consist of a $1.5m cash base salary, a cash bonus of $7.9m and stock-linked awards totalling $23.6m, which will vest over three years and are subject to clawbacks. 

The package exceeds the $31.5m awarded to Jamie Dimon, chief executive of JPMorgan Chase, for 2020. JPMorgan’s shares fell slightly for the year, and Mr Dimon’s pay was unchanged from 2019. The two banks are the only major Wall Street firms to announce chief executive pay to date. 

The fourth quarter in particular was a blockbuster for Morgan Stanley, with net profits jumping 51 per cent to $3.4bn. Trading revenues rose 32 per cent, and investment banking fees by 46 per cent. Mr Gorman commented in a call with analysts this week that “our firm is at an inflection point and the next decade will be characterised by growth”.

Early in 2020 Mr Gorman announced a $13bn acquisition of ETrade, launching Morgan Stanley into the low-cost brokerage space and adding more than 5m new customers, many of them millennials. That was the largest deal by a global bank since the financial crisis.

It was followed, in October, by news the bank would buy the investment manager Eaton Vance for $7bn, making Morgan Stanley one of the world’s largest asset managers, almost doubling its assets under management to $1.2tn.