Morgan Stanley CEO James Gorman will receive $18 million in compensation for 2013, an 85% raise from 2012, according to a regulatory filing. Gorman has overseen a near-wholesale transformation of the bank and has returned it to profitability by shifting its focus toward more conservative businesses like wealth and asset management.
The 85% raise includes a base salary of $1.5 million, a $316,000 bonus, $5 million in deferred pay, $5 million in stock and options awards, and $6 million in incentive payments for the bank's performance. It still pales in comparison to the pay of the leader of Morgan Stanley's main rival, Goldman Sachs, whose chairman and CEO Lloyd Blankfein got $23 million in 2013.
The pay jump follows a banner year for the company — its stock jumped up 64% in 2013, compared to 33% for an index of financial stocks. The bank was able to win approval from the Federal Reserve to double its quarterly dividend to 10 cents a share and buy back $1 billion in stock over the coming year.
The successful year, which followed a small net loss in 2012, was buoyed by buying out Citigroup's remaining stake in its jointly owned wealth management unit Morgan Stanley Smith Barney. In 2013, Morgan Stanley got 68% of its profits from wealth and asset management; in 2006, when the bank was trying to match Goldman Sachs in trading and investment banking, only 15% of its profits came from wealth and asset management.