Morgan Stanley CEO Gets $40M 2006 Bonus

[Herman Munster]

http://biz.yahoo.com/ap/061215/mack_bonus.html?.v=6

NEW YORK (AP) -- Morgan Stanley Inc., the second-largest U.S. investment house, gave chief executive John Mack $40 million in stock and options for 2006, reflecting the largest bonus awarded to a Wall Street CEO.

Mack, 62, was awarded 461,821 stock units valued at $36.2 million on December 12, according to a filing with the Securities and Exchange Commission late Thursday. He was also awarded 178,945 options to buy Morgan Stanley shares, valued at about $4 million.

Morgan Stanley is expected to report its best year ever on Tuesday, buoyed by a record run in the stock market and an unprecedented level of takeover activity. Goldman Sachs Group Inc., Bear Stearns Cos. and Lehman Brothers Holdings Inc. turned in record profit reports this week.

The record bonus comes 18 months since he rejoined Morgan Stanley after an internal struggle over the company's lackluster performance caused the ouster of CEO Philip Purcell. At the time, Mack pledged to investors that he would turn around the company's sagging stock price and bolster profits.

[RobofSWVA]

1. how long

until we hear an enron like story about insider trading. These guys might be good but they are not THAT good.

[lapfog_1]

2. That's an average of $740 per each employee

Morgan Stanley having 54,000 employees worldwide. I'm sure that most employees (not the brokers and such) would really appreciate a end of year bonus of $740.

[RobofSWVA]

3. and that's just the president of the company

I'm sure the rest of the board "earned" multimillion dollar bonuses too. They could have given everyone at least $1000-2000 for xmas.

[Lucky Luciano]

6. They do get comped well!

Sometimes the star traders and I-Bankers make more than the CEOs do - often this is the case since their productivity is so direct and quantifiable. That said, our bank has about 1000 managing directors from what I understand. The average bonus for an MD is $1.7M this year. I would not be surprised to see the ***MEDIAN*** bonus for middle office and higher to be $200K. If the back office is included, that would probably bring the median down to $100K - but still, this is one industry where the workers cannot complain.

[unblock]

5. uh, i think they all DO get bonuses

bonuses are a normal part of wall street compensation, usually for every single employee.

obviously not always in the multimillions for each employee, but the typical professional type at goldman made an absolute killing this year.

you can complain all you like about how skewed the share is -- your boss might get 10 times your bonus, and his boss 10 times that -- but when there's a SHITLOAD of money to go around, everybody gets a nice bonus.

i work my ass off structuring deals, but i'd probably have made more delivering mail for goldman this year....

[wain]

4. These examples of bonuses and salaries subvert capitalism

It's the boards that approve these kinds of packages. Are they getting theirs too?

I agree to compensate the CEO and officers greatly (if they are successful), but not obscenely. I work for a corporation that shares profitable years with ALL employees (generously) and the CEO makes a reasonable salary and bonus - less than 10 million (it's a Fortune 500).

Beyond that, it begins to enter the territory of greed. That speaks ill of the company's integrity.

:)

[Lucky Luciano]

7. Wall St is one industry that compensates all employees

well in great years....If median bonuses are in the 6 figures (well into), then all the employees are happy. Well....not all....most want more than what they got and plenty of people will feel they got fucked because they only got $1.5M or something, but overall, the industry pays its employees well in bonanza years - this has been a bonanza year. I work on the street. The one thing I really like about it is the fast pace, the excitement, and the thrill of making a trade. It is also a meritocracy in the most absolute sense of the word - another very good thing. I work 53 hours a week, which is not too bad if you ask me since I have a 5 minute commute. The only part I hate is being on the desk at 7am x( That would be the only reason I would retire young - because I hate mornings!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! There is so much excitement there and I find it exhilirating.

At the same time, I would probably retire young anyway. Upon retirement, I would want to tour the country finding mathematically talented underprivileged kids and try to help give them a leg up. I would love to educate groups of 10 at an exceptional rate with a real hands-on approach. The math behind options is really cool too, so I can show immediate applications that they may appreciate, so there is no bitching about "What am I ever going to use this for?" Imagine a high school kid entering college knowing how to price an option from the Black-Scholes formula - deriving the formula too! Ha! I would mentor and help them get into college too. Scholarship would be a possibility, but that depends on how much I decide to retire on! I certainly don't need $40M, but if I am on the pace, I will certainly go for it.

This is how I would start out the mentoring program....I would then try to get others to sign up for this too. My current boss would totally go for it in retirment as well. He loves math and he already spends a lot of time with inner city kids on the weekend being a mentor. Then we could get a whole group of people involved in such a program to find talent and bring it out. I would feel really good about giving back in that way. I would definitely want to particiapate in the hand-on aspect as well. Merely donating money, while respectable, just isn't the same as taking the time to really affect someone.

rambled.......