Capital Markets

Mnuchin expected to be Trump’s Treasury secretary

Donald Trump has chosen Steven Mnuchin as his Treasury secretary, US media outlets reported on Tuesday, positioning the former Goldman Sachs banker to be the latest Wall Street veteran to receive a top administration post. Mr Mnuchin chairs both Dune Capital Management and Dune Entertainment Partners and has been a longtime business associate of Mr […]

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Banks

Financial system more vulnerable after Trump victory, says BoE

The US election outcome has “reinforced existing vulnerabilities” in the financial system, the Bank of England has warned, adding that the outlook for financial stability in the UK remains challenging. The BoE said on Wednesday that vulnerabilities that were already considered “elevated” have worsened since its last report on financial stability in July, in the […]

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Property

Zoopla wins back customers from online property rival

Zoopla chief executive Alex Chesterman has branded rival OnTheMarket “a failed experiment”, and said that his property site was winning back customers at a record rate. OnTheMarket was set up last year, aiming to compete with Zoopla and Rightmove, the UK’s two biggest property portals. It allowed estate agents to list their properties more cheaply […]

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Financial

Hard-hit online lender CAN Capital makes executive changes

The biggest online lender to small businesses in the US has pulled down the shutters and put its top managers on a leave of absence, in the latest blow to an industry grappling with mounting fears over credit quality. Atlanta-based CAN Capital said on Tuesday that it had replaced a trio of senior executives, after […]

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Banks

BoE stress tests: all you need to know

The Bank of England has released the results of its latest round of its annual banking stress tests and its semi-annual financial stability report this morning. Used to measure the resilience of a bank’s balance sheet in adverse scenarios, the stress tests measured the impact of a severe slowdown in Chinese growth, a global recession […]

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Categorized | Banks

Morgan Stanley chief given pay cut


Posted on January 31, 2013

James Gorman, Morgan Stanley chief executive, has been handed a 7.1 per cent pay cut despite a near-doubling of his performance-related bonus.

Details of Mr Gorman’s pay, which was foreshadowed last week in a regulatory filing, were released by the bank on Thursday after Morgan Stanley’s board met to finalise his package.

    Mr Gorman was given a performance-related bonus of $3.75m, on top of $2.6m of deferred cash, $2.6m of stock options and a salary of $800,000. Mr Gorman’s salary for 2013 has been almost doubled to $1.5m, the bank said Thursday.

    The $9.75m package for 2012 is below the $10.5m Mr Gorman earned for 2011. The chief executive said he has been slashing pay and bonuses for his bankers as he seeks to cut costs and boost returns for the restructured bank’s shareholders.

    Robert Kidder, independent lead director of the bank’s board, said in Thursday’s filing: “2012 was a transition year for Morgan Stanley, and management along with much of the organisation saw reduced compensation.

    “The board is confident of the strategic decisions taken by senior management and our decision to grant these forward-looking LTIP [long-term incentive programme] awards reflects that confidence.”

    Details of Mr Gorman’s new LTIP were also outlined in the filing. The chief executive will receive $3.75m if he meets certain targets, which were not disclosed. That is up from the $1.94m Mr Gorman could earn under the bank’s last performance payout system, announced in 2011.

    Mr Gorman could earn as much as $7.5m if he “meaningfully” surpasses the company’s targets, or nothing if he fails to match those goals.

    Ruth Porat, the bank’s chief financial officer, will earn $2.75m if she meets goals. Greg Fleming, head of Morgan Stanley wealth management, and Colm Kelleher, president of the bank’s institutional securities business, would each earn $3m.

    Morgan Stanley’s return on equity – a key measure of its profitability – was a mere 6 per cent in the last three months of 2012, lagging behind competitors such as Goldman Sachs. Mr Gorman has said he wants to achieve a return on equity of at least 10 per cent.