Morgan Stanley's Mack Gets Record $40 Million Bonus

[melm00se]

Nice work if you can get it:

Dec. 15 (Bloomberg) -- Morgan Stanley gave Chief Executive Officer John Mack the biggest bonus for the head of a Wall Street firm, awarding him $40 million as the company headed for the best profit in its 71-year history.

Mack, 62, was granted stock valued at $36.2 million as of Dec. 12, and about $4 million in options to buy Morgan Stanley shares, the company said yesterday in a filing with the U.S. Securities and Exchange Commission. The firm also granted more than $57 million in bonuses for seven other top executives.

The payout for Mack, 44 percent more than Morgan Stanley awarded him last year, eclipses the $38.3 million in total compensation Henry Paulson received in 2005 as CEO of Goldman Sachs Group Inc. Shares of Morgan Stanley, the second-biggest U.S. securities firm by market value, are having their best year since 2003 after Mack put the firm on course for record earnings.

``You expect performance to be reflected in the compensation,'' said Laura Thatcher, an Atlanta-based partner in charge of the executive-compensation practice at law firm Alston & Bird LLP. ``You're talking about staggeringly big companies with huge market caps and huge performance.''


http://www.bloomberg.com/apps/news?pid=20670001&refer=&...
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where do I sign up for 1% of this?

edited cuz I forgot the link

[SeattleGirl]

1. "You expect performance to be reflected in the compensation."

Hmmmmm, too bad that doesn't apply to regular Jane and John Doe Everyperson.

[Ellis Wyatt]

4. stock price

The stock has gone up 2x that of the rest of their industry, which means an extra $10 billion in value for the company.

When Mack came back, the company was in shambles, had an extremely poor name in the industry due to various scandals, and their business had stagnated.

He turned the place around.

Sure, $40 million is a tough number to look at, but his strategic decisions, have made tens of billions of dollars in profit/value for the firm in the last couple years.

So this equates to about a 1% commission rate.

[Lucky Luciano]

6. I agree...this CEO deserves his comp...

unlike the other frauds out there taking monster bonuses while their stock wallows and the horizons look worse. Those clowns would take bonuses by virtue of their title - sort of a "Divine right of CEOs" thing. This is not the case - Mack has merit. Also, employees of MS and other banks do quite well, so the ratio of CEO pay to employee pay is within reason.

[OhioChick]

2. The destruction of the middle class

will also be known for the high compensation of the CEO's. Shameful.

[Divernan]

3. That's peanuts! Hedge fund managers are getting $1 billion bonuses each!

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!

[OhioChick]

5. And

Where does this "trickle down" theory come into play?

[Divernan]

7. No, that's a trickle UP theory. See, we pay 29% credit card interest ;

then the hedge funds - which may require a minimum of $1 million dollars per investment, can return 30% interest to their wealthy investors. It's the neocon way.

[stillcool]

8. Crime pays...

The Rich and the Super-Rich: A Study in the Power of Money Today
by Ferdinand Lundberg

[saigon68]

9. ^

[Hope springs eternal]

10. This is why

we need a luxury tax above 10 million