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.