Morgan Stanley Awards $20 Million Bonuses to Incoming CEO and Top Executives

Earlier this week, Ted Pick emerged as the victor in the race to succeed the long-serving CEO, James Gorman, effective from January 1st.

Morgan Stanley (MS.N) has disclosed that its incoming CEO, Ted Pick, along with two other top executives, Andy Saperstein and Dan Simkowitz, who were contenders for the CEO position, will receive one-time bonuses of $20 million each.

This announcement was made in a filing by the bank on Friday.

The bonuses have been structured as performance-linked stock awards and are based on fair value calculations tied to the current stock price of the bank. These bonuses are scheduled to vest in the year 2027.

Earlier this week, Ted Pick emerged as the victor in the race to succeed the long-serving CEO, James Gorman, effective from January 1st.

Pick has affirmed his commitment to maintaining the bank’s strategic direction amidst a challenging deal-making environment and an uncertain economic outlook.

Pick, aged 54, currently leads Morgan Stanley’s institutional securities unit, which houses its prominent investment banking and trading operations.

He is a seasoned Morgan Stanley veteran with over three decades of experience at the bank, having worked his way up from trading to overseeing equity capital markets and fixed income.

Andy Saperstein, aged 56, is set to take over responsibility for wealth and investment management from the start of the new year, while Dan Simkowitz, aged 57, will assume the role of overseeing institutional securities, transitioning from his prior role as the leader of the investment management division.

Notably, it is atypical for CEO candidates in the finance industry to remain with the company if they are not selected for the top role, making the bonuses awarded to all three executives a departure from convention.

Ted Pick has expressed his admiration for Saperstein and Simkowitz, describing them as “terrific friends” in an interview with Reuters. The outgoing CEO, James Gorman, also commended the three executives for their contributions.

Morgan Stanley’s Chairman and current CEO, James Gorman, will assume the position of executive chairman and may remain in this role for up to a year to assist in Ted Pick’s transition into the CEO role.

Gorman, who took on the role of CEO in January 2010, has overseen a transformation of Morgan Stanley during his tenure, turning it into a formidable force in wealth management and making significant acquisitions, including broker E*Trade and asset manager Eaton Vance.

His leadership has guided the bank through the challenges posed by the financial crisis alongside counterparts at other major institutions like Bank of America and JPMorgan Chase.