Ex-Morgan Stanley Banker Seeks Bonus After $100 Million YearBy
Bernard Mourad arranged $23 billion merger for Patrick Drahi
Mourad seeking $1.5 million withheld after he left bank
A former Morgan Stanley dealmaker in Paris told an employment tribunal that the lender unfairly withheld $1.5 million in deferred pay a year after he raked in more than $100 million in fees while advising Patrick Drahi on a $23 billion acquisition.
Bernard Mourad told judges Monday that the New York-based bank used an incentive plan to deny him a bonus he earned at Morgan Stanley France before he left to work for Drahi in 2015. Lawyers for the bank countered that Mourad knew the compensation scheme was designed to “reward loyalty” tied to continued presence at the firm.
That’s “totally illegal under French law” if no express consent was granted, Mourad’s lawyer, Eric Manca replied during the hearing at the Paris employment tribunal. “It’s a bit like saying that your salary for July will only be paid if you’re still working at the company four years later.”
Mourad, who left Drahi’s Altice Media Group last year to take a role on Emmanuel Macron’s presidential campaign, is seeking 160,000 euros ($181,000) in damages on top of 1.3 million euros in deferred pay for work he performed between 2012 and 2014 -- the vast majority in shares.
The Mourad lawsuit was filed in 2015, shortly after he quit Morgan Stanley to become chairman of Altice, which owns news outlets such as French newspaper Liberation. Bankers routinely turn to specialist labor courts throughout Europe to recoup lost bonuses and rehabilitate reputations, with varying degrees of success.
The Mourad case was first discussed in September, days before the dealmaker announced he was giving up various roles at Drahi’s telecom companies to join Macron’s campaign. After a heated exchange last year between Manca and Francois Farmine, the bank’s lawyer, during the roll call of the day’s cases, the panel of Paris judges had decided to delay the hearing until July 3.
In a more peaceful atmosphere at the hearing Monday, the two lawyers disagreed about whether New York or French law applies to the dispute. Hugh Fraser, a spokesman for Morgan Stanley, declined to comment on the case after the hearing.
The incentive plan, which was set up in the U.S., implements a delayed vesting schedule to acquire the rights to the payout, said Farmine.
“Why? Because it’s a tool meant to favor loyalty,” Farmine said. “He’s trying to speed things up.”
$50 Million in Fees
Mourad told the panel of four judges that he “never” signed any document, even electronically, consenting to such a schedule or that New York law should prevail.
Manca said France’s highest court has ruled in a separate case that in such circumstances Morgan Stanley can’t withhold pay Mourad earned as that would be tantamount to a “double penalty.”
The lawyer emphasized that Mourad was one of the most profitable employees at Morgan Stanley. In about four months in 2015, he generated nearly $50 million in fees after having billed clients for more than twice as much the previous year when he orchestrated the $23 billion takeover that combined Drahi’s Numericable Group with rival cable and wireless provider SFR, Manca said.
For Morgan Stanley’s lawyer, Mourad’s stature as a top executive at the bank meant he couldn’t ignore the way the compensation plans worked. To back his claim, Farmine said Mourad accessed a website specifically dedicated to the compensation plan where the vesting schedule is “very clearly mentioned” nearly 100 times and received multiple emails about it.
Manca replied that Mourad went on the website simply to see the variation of bonuses he was entitled to, a move that can’t be mistaken as an agreement that New York law should prevail.
Mourad -- whose stint with Macron came to an end after the election -- said he sees himself as “a good leaver” and is surprised by Morgan Stanley’s behavior.
He said in a closing statement that Morgan Stanley treats people it fires better than him on that front by allowing them to get access to their deferred pay.
“I started as an intern at Morgan Stanley,” Mourad said of his career that began at the bank’s London office in the early 2000s.
The ruling will be issued Oct. 3.
— With assistance by Chris Elser