Quote: "Jan. 22 (Bloomberg) -- James Gorman, who became Morgan Stanley’s chief executive officer at the start of this year, was awarded deferred stock grants valued at about $8.6 million for his performance last year, when the shares rose 85 percent even as profit lagged peers. Gorman, 51, will get 194,590 restricted shares, valued at $5.7 million at yesterday’s closing price of $29.34, plus the right to at least 97,295 more shares that would be granted in 2013 if certain company goals are met"
Morgan Stanley™'s Gorman Gets $8.6 Mln Stock Bonus (Update1)
This is the writing on the wall, but what does it say? A bunch of restricted stock (of which the details are not disclosed) and essentially a free three year call option, tied to "certain company goals". Those company goals can be guaranteed to be 100% attainable. This is possibly a politically driven action, where large salaries have been news, while stock based (supposedly "performance based") compensation is being offered to quiet the masses. Does the Morgan Stanley CEO expect the deferred stock grants to be worth more than today? That depends on the call option's strike price, and whether mark to magic remains in place.Mark to magic is the removal of the previously required "mark to market" pricing of a company's assets. This effectively erased all long term losses from the bank's books, as they amortize (aka hide) the potential risk and losses over the term of the asset class. Maybe in 20-30 years, the banks will finally take their hit, once their stocks reach new highs, they will offset the long term losses.
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