Morgan Stanley Chief John Mack Will Take No Bonus This Year

CNBC's Charlie Gasparino is reporting that Morgan Stanley chief John Mack will not be taking a bonus this year. It is the second consecutive year that John Mack will forgo a bonus.

In recent days, Mr. Mack, and the firm's two co-presidents, James Gorman and Walid Chammah, decided that taking a bonus this year would send the wrong message, especially since Morgan Stanley accepted $10 billion from the U.S. government in return for preferred shares of the company, this person added. The firm also is laying off thousands of employees amid difficult market conditions and a slowdown in investment-banking business.

There are also some interesting changes to the Morgan Stanley bonus system, according to Bloomberg:

Starting this year, Morgan Stanley plans to make part of employees' year-end cash bonuses subject to a "clawback provision" that enables the firm to take back the money "if the individual engages in conduct detrimental to the firm," the memo said. Morgan Stanley isn't granting any stock options as part of year-end compensation in 2008, the firm said.

Starting next year, the company will tie a portion of senior executives' compensation to the firm's performance over a three- year period, the memo said. One-third will be tied to the firm's return on equity, another third to ROE compared with peers, and the last third tied to total shareholder return on a relative basis, the memo said.

Comments

[sollosi]

$10 million salary per year, and no Bonus!!!. Oh, oh,!! the sacrifices these executives have to make.

[Wiredwilly]

Gee, what a guy. How about giving up Liberty and serving some jail time for fraud & robbing the taxpayers of $750,000,000,000.

[Rule Of Law]

Let him go without a house and food--then I'll be impressed!

[RhondaSTL]

Here in the real world, bonuses are tied to performance achievement, awarded when performance has exceeded expectations. Performance for a CEO is tied to profits. Therefore .............

[williambanzai7]

MELE KALKIMAKA WALL STREET
(Mele Kalikimaka, Bing Crosby Christmas)
WilliamBanzai7

SECURITIZED ASSET MARKDOWNs is one way say no bonus will be paid for Christmas 2008
That's the shareholder greeting to be sent to them from the land where no dividends are paid
Here we know that losses are obscenely high
If you think you are underpaid then go take a hike
SECURITIZED ASSET MARKDOWNS is the shareholder way to say no Merry Christmas bonus for you

The Andrew Sister's, Andrew Cuomo and Bing Crosby:
There they know that LOSSES are OBSCENELY HIGH
If they think they're underpaid then they should go take a hike
Mele Kalikimaka is the perfect way to say NO CHRISTMAS BONUS FOR YOU

Mele Kalikimaka is what we all should say to WALL STREET BANKERS WHO WANT A YEAR END BONUS PAID
Thats the perfect message to be sent to them in the land where bailouts saved the day
Here we know that LOSSES HAVE BEEN OBSCENELY HIGH
LETS TELL ALL THEM BANKERS TO KISS US WHERE THE SUN DON'T SHINE
Mele Kalikimaka is the perfect way to say no Christmas Bonus
no very Merry Christmas Bonus , no very, very, merry, merry Christmas Bonus for youuuuuuuuuu

[rr52]

Aw Gee, how swell.

[Pharos]

How about zero salary?

[Harpseal60]

Wow, no bonus...that is real big of him. These CEO's have no idea what reality is... do they?

[SeriousBlack]

Oooooohhhhhh, no bonus while your company is losing money and jobs and taking billions from the government! What a SACRIFICE. Makes me sick.

[dandypuddin]

Gosh, how is he going to survive on his multi-million dollar salary? I feel so bad for him.

[LeeCalif]

Gosh, what a martyr. What a man. What a king of a man. What a big guy. What a great person.

What bullsh*t.

[MsRy]

Bonuses are usually far more lucrative than salaries. That's why the Big 3 working for $1 a year salary is no thing. You don't see them dumping their bonus - that's where the $$'s at.

[sonoffestus]

He's giving up his bonus, BUT the board probably just bought him a muti-million dollar annuity life insurance policy. You don't hear about these vehicles much, but they are a means to give executives
compensation that flies under the radar. They can be worth MILLIONS when they are eventually cashed in.

[MsRy]

The more likely situation is that his comp. package had annuities to begin with. No exec. would take a job without one. BoD would not be buying him one this far into the game. They are common in these packages, and they (multiple policies for all the execs) are in trust at Merril or someplace. Annuities are not a secret.

[Mikeeee]

A corresponding cut in salary would be nice, say $1,000 for every employee layed off?

[dandypuddin]

Wouldn't that be great if all CEOs did have to take a cut in pay for each laid off worker? I like that.

[Marcospinelli]

The big 3 auto companies have to be nationalized and put to work creating green vehicles, mass transit systems (buses and trains).

With all due respect to Obama, a massive infrastructure program isn't going to jumpstart this economy. Putting Americans to work tarring roadways is work for chain gangs, prisoners, not middle-class white collar American workers.

What the bailout was supposed to do was to get money into Americans' hands so that they'd start buying again. That didn't happen for two reasons - 1) Banks didn't get the money to Americans because they've decided we are bad risks, and 2) Had we gotten the money, we would have saved it for the hard times ahead or paid on our existing debt.

Forgiving Americans' debts, wiping out what we owe is what it's going to take to get the engine going again. Congress must then undo the Bankruptcy Reform Act that Democrats like Dianne Feinstein signed on to a couple of years ago, where credit companies could charge usury rates.

Reregulating business must happen, too, as well as restructuring and reregulating accounting systems.

And once that has happened, never letting another Republican get anywhere close to "reforming" government.

WIPE OUT CONSUMER DEBT!

[frobot]

It would be nice if an executive from one of these firms said simply, "I'm not receiving a bonus because I don't deserve one. Nobody on the executive team does. We failed the company, the shareholders, the employees, and the country."

Instead, they present their decision to forgo a bonus as being driven by perception, or not wanting to "send the wrong message", etc.

But I guess the fact that they don't want to admit culpability or failure of any sort is jut another form of managing the message.