(Bloomberg) — Morgan Stanley paid former boss James Gorman $27 million for his work as executive chairman last year after he handed the chief executive officer reins to his successor, Ted Pick.
Gorman, who ran the firm for 14 years through the end of 2023, was awarded a $1.5 million salary, a $12.75 million cash bonus and another $12.75 million of performance-based incentive compensation, according to a filing Friday. That’s $10 million less than his haul for 2023, his final year as CEO. It’s also in line with what co-presidents Andy Saperstein and Dan Simkowitz earned last year.
Gorman’s pay for last year surpasses the $725,000 John Dugan received for his work as Citigroup Inc.’s chairman in 2024. It also tops the $590,703 that Wells Fargo & Co. paid to Chairman Steve Black for that year.
Still, neither had earlier served as CEO, and it’s not entirely uncommon for CEOs-turned-executive-chairmen to be paid more in line with executive officers than other board members. Ajay Banga earned $17.4 million in 2021 when he was executive chairman at Mastercard Inc., after earning $27.8 million for the prior year, his last as CEO.
Morgan Stanley’s board considered factors including that Gorman “successfully accomplished an orderly, multi-year CEO succession planning process,” which was also cited in the pay decision for his last year in the top job. He also “assisted the CEO in his role, acting as a mentor, sounding board, and helping to prepare him to become chairman of the board,” according to the filing.
Gorman took the reins at Morgan Stanley after its near-collapse during the financial crisis, and is credited with engineering a multi-year transformation of the firm with wealth management at its core. Pick took over at the start of last year and, in a rarity for Wall Street, the other two contenders for the job — Saperstein and Simkowitz — agreed to stay on.
Pick, who earned $34 million for his first year as CEO, added the chairman role at the start of 2025. Gorman will serve as a non-employee advisor to Morgan Stanley this year and next for a fee of $400,000 a year, according to the filing Friday.
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