Morgan Stanley's 2022 Profit, Revenue Plummet; CEO Pay Cut by 10%
Morgan Stanley's 2021 saw a significant boost in revenue and profit, thanks to acquisitions and favorable market conditions. However, 2022 brought a 27% profit drop to $11 billion and a 10% revenue slump to $53.7 billion. The bank's return on tangible common equity (ROTCE) and profit levels returned to 2020 levels.
CEO James Gorman's compensation was cut by 10% in 2022, from $35 million to $31.5 million. This reduction, which includes a $1.5 million salary, a $7.5 million cash bonus, a $4.5 million deferred equity award, and $18 million in performance-vested equity, could potentially shift the ranking of the highest-paid CEOs among the six largest U.S. banks.
Morgan Stanley's compensation committee attributed the pay cut to challenging economic conditions and the bank's performance in 2022, which was lower than the record performance in 2021. The bank also cut around 1,600 jobs in December 2022. Despite ending 2022 with a 15.3% ROTCE, well below its goal of 20%, the bank remains optimistic. Six Morgan Stanley executives, including Gorman and co-president Ted Pick, sold a combined $54 million in Morgan Stanley stock this week.
Morgan Stanley's 2022 saw a significant downturn in profit and revenue, leading to a 10% cut in CEO James Gorman's compensation. The bank's ROTCE fell short of its target, but the bank remains confident in its future prospects.
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