Morgan Stanley shareholders approved the company’s pay plan for executives including Chief Executive Officer James Gorman.
The advisory vote on compensation passed with 89 percent in favor according to preliminary results, Corporate Secretary Martin Cohen said Tuesday at the firm’s annual meeting in Purchase, New York. All directors were elected with at least 97 percent of the total, Cohen said. The meeting lasted less than 30 minutes and there were no questions from shareholders.
Morgan Stanley boosted Gorman’s 2014 pay package by 25 percent to $22.5 million as the bank’s shares jumped more than 23 percent for the third straight year. While investors have rewarded Gorman’s plan to rely more on wealth management for stable earnings, the New York-based company’s return on equity was less than 6 percent in each of those years, short of his 10 percent goal.
About 92 percent of ballots cast approved Gorman’s $18 million package for 2013 at last year’s meeting.
The compensation committee deemed Gorman “as exceeding expectations” in 2014 and found the firm’s performance and shareholder returns “strong, with room for continued progress,” the company said in its proxy statement. When setting his pay, the panel didn’t consider Morgan Stanley’s $2.6 billion settlement of U.S. probes into its creation and sale of mortgage-backed securities.
Gorman said in an interview after the meeting that he expects that the Federal Reserve will raise rates this year, probably in the second half. The exact timing of an increase is “not that big a deal” compared to the improved economy, he said.
Emphasizing Morgan Stanley’s culture and ethics will be one of his top priorities this year, Gorman said. The firm isn’t among the banks poised to plead guilty over allegations they manipulated currency markets.
“In this case, we didn’t seem to have an issue, which is what you would hope and what you would expect,” he said.