Morgan Stanley CEO gets $40Million 2006 bonus

[Jon8503]

Edited on Sat Dec-16-06 12:32 AM by Jon8503
By JOE BEL BRUNO, AP Business Writer
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How many people would this feed? Just seems obscene.
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NEW YORK - 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.

He appears to be holding up his end of the bargain. Since joining Morgan Stanley in June 2005, shares in the company have risen about 62 percent — with some 40 percent of that coming in 2006.

Analysts project the company will report earnings of $6.77 per share on $33.73 billion of revenue, according to Thomson Financial. Most on Wall Street expect Morgan Stanley will easily surpass these projections.

Mack's compensation eclipses the $38.3 million former Goldman Sachs CEO Henry Paulson received in 2005. Earlier this week, Lehman Brothers disclosed that CEO Richard Fuld received $10.9 million in stock for 2006.

Bear Stearns, Goldman Sachs, and Merrill Lynch & Co. have yet to file regulatory reports detailing bonus packages for their top executives. However, on average, 2006 will go down as some of the highest overall compensation numbers in Wall Street's history.

Goldman Sachs said in its full-year earnings report that overall compensation this year was about $16.4 billion, or an average of about $622,000 per employee. Lehman said it would pay its employees an average of $335,441 this year — paying 25,936 workers a total of $7.7 billion in salary, bonuses and other benefits. At Bear Stearns, staff would receive an average of $321,740 in compensation.

Morgan Stanley also reported stock bonuses for seven of its other top executive officers, according to regulatory filings.

Among them was co-presidents' Zoe Cruz, who received $17 million in stock and $1.92 million in options, and Robert Scully, was awarded $11.4 million in stock and $1.28 million in options. Chief Financial Officer David Sidwell was paid $7.98 million in stock and $890,291 in options.

Shares of the company slipped 34 cents to close at $79.26.

http://news.yahoo.com/s/ap/20061216/ap_on_bi_ge/mack_bonus

[Turbineguy]

1. And the customers wonder...

"Where's my yacht?"

[Montauk6]

2. ho ho ho...

[valerief]

3. Yeah, but 40 mil ain't what it used to be.

:banghead:

[Jon8503]

4. CEO Pay

Overview

Some observers thought that the spate of corporate scandals in recent years would reverse trends in executive pay, or at least put a cap on pay packages. Indde Yet in spite of all the bad press and shareholder outrage, executive is rebounding. According to THE ECONOMIST, in 2004 America's top 2000 chief executives enjoyed pay raises of around 30% and earned an average of $5.7m. The equation of executive packages may look different these days — with more money in cash payments and less in stock options. However, on March 21, 2004, THE FINANCIAL TIMES reported that yearly bonus payments are heading back to the high levels seen in the boom of the late 1990s. A study by Mercer Human Resource Consulting for THE WALL STREET JOURNAL shows that last year's bonuses for the CEOs at 100 large American companies rose by 46.4%. The median bonus was $1.14m.

Several aspects of these big pay-outs cause consternation among stockholders and employees. Although figures vary somewhat, the ratio of the salary of the company boss to the average American worker is quite dramatic. Different studies have come to different ratios — all of which are significant and have increased over the years.



How Much Does the Big Boss Make?

Turns out that American executive compensation rates are quite different from those of the rest of the developed world. In Japan a typical executive makes eleven times what a typical worker brings home; in Britain, 22 times. In America... it is 475 times. (link below)


http://www.pbs.org/now/politics/executivepay06.html

[Divernan]

5. $40 Mil is peanuts! Hedge fund managers are getting $1 billion bonuses.

Try to wrap your minds around some mind-boggling numbers! This from an article in the NY Times on Dec. 13th:

"Now with top hedge fund executives expected to receive annual bonuses that should exceed $1 billion this year — by comparison, the best- paid Wall Street chief executive may get $50 million — they have become even more lucrative game."

More from the article:

In the fast-shifting sands of New York’s moneyed classes, the explosion of hedge fund wealth has created a new financial pecking order. A century ago, the steel and oil money of Frick and Rockefeller was deemed to be new until it came to endow some of New York’s great cultural institutions. In the 1980s and 1990s, the buyout kings Henry R. Kravis and Ronald O. Perelman became billionaires and were furiously courted to join museum boards.

Now institutions like the Guggenheim, the Whitney Museum and Lincoln Center are making a push for the newest money on the block as they try to lure hedge fund executives to join their boards. This effort has dovetailed with an emerging tendency by hedge fund moguls to spread their wings a bit in greater New York society.

“A lot of these guys when they get their wealth and power, they want something to go along with that,” said David Patrick Columbia, who has occasionally featured photographs of Mr. Ganek and his wife, Danielle, on his Web site, New York Social Diary. “Some collect art, some want to be philanthropists and once they get into the swim they find themselves being wined and dined by a variety of people. This experience gives them an affirmation of their social magnitude and that is an alluring thing for someone who makes a billion dollars.” The bait has always been simple: It is one thing to be rich and have world-class art on your walls, but it may not match the frisson that comes with having your name attached to a wing, rotunda or atrium. So, Mr. Kravis joined the board at the Metropolitan Museum of Art and got his wing; Mr. Perelman cast his lot with the Guggenheim and endowed a rotunda. More recently, Donald B. Marron, the former chief executive of PaineWebber and past president of the Museum of Modern Art board, had an atrium named after him and his wife.

(End of quote)
And that, boys and girls, is how the rich become the mega rich!