LAL Posted January 4, 2007 Report Share Posted January 4, 2007 $110 grand a day...how nice Morgan Stanley CEO gets $40M bonus John Mack receives stock and options worth $40 million, but newspaper says that may not be the top CEO payday on Wall Street this year. December 15 2006: 7:55 AM EST NEW YORK (Reuters) -- Investment bank Morgan Stanley's CEO John Mack has been awarded a bonus worth about $40 million in stock and options for 2006, according to a regulatory filing Thursday. However, Mack's compensation is likely to be topped by one or more of his rivals, according to a report published Friday by The Wall Street Journal. Morgan Stanley CEO John Mack The payout comes amid a boom time for investment banks, advising private equity firms flush with cash in their pursuit of acquisitions, raking in hedge fund fees and profiting from elevated levels of bond and stock trading. Goldman record pay up 40 percent The high profits are translating into multi-million dollar bonus awards for bankers - two studies released in November show that Wall Street bonuses should rise by double-digit percentages this year. The Journal said that Goldman Sachs Group (Charts) CEO Lloyd Blankfein's compensation will exceed $50 million, citing a person familiar with the matter. The paper said that is believed to be a record for big-firm chief executives. Goldman Sachs was not immediately available for comment. Analysts told the Journal they expect a handful of other CEOs could make $40 million to $50 million or higher, including James Cayne of Bear Stearns (Charts), Stan O'Neal of Merrill Lynch (Charts) and Richard Fuld of Lehman Brothers Holdings (Charts). Fuld has already been granted stock worth $10.9 million on the date of issue earlier this month, according to a Securities and Exchange Commission filing. Large jumps in profits to record levels were reported this week by Goldman, Bear Stearns and Lehman Brothers. The Goldman report detailed that spending on compensation at the firm is up 40 percent in the just completed fiscal year to $16.5 billion, although a hiring surge limited the rise in average per-employee pay there to a 25 percent gain, taking the average to $621,906. Morgan Stanley (Charts) is scheduled to report its fourth-quarter earnings next week, with analysts surveyed by First Call forecasting a far more narrow 5 percent rise in earnings. Bonus time is the highlight of the year for many investment bankers, as it constitutes much of the annual compensation of senior bankers and traders. Banks typically award bonuses between December and February. Bonuses should rise 15 to 20 percent, according to Options Group, a New York executive search firm, last month. Johnson Associates Inc., a New York compensation consultant, estimates a 10 to 15 percent increase. Mack's bonus According to Morgan Stanley's filing, Mack was awarded 461,821 stock units convertible to shares on a 1:1 basis on Dec. 12. The company's shares closed at $78.40 that day, according to Reuters data, valuing the total at $36.2 million. He was also awarded 178,945 options, which the company valued at $22.46 each, giving a total of $4 million. Half the options will vest in Jan. 2009 and the remainder in Jan. 2010. The filing said that the stock and options reflected 100 percent of Mack's 2006 above-base compensation. His base pay last year was $337,534. Mack rejoined Morgan Stanley on June 30, 2005 after years of weak performance, internal strife and a flood of departures led to the ousting of CEO Philip Purcell - the man who pushed out then-President Mack in 2001. When he rejoined the bank Mack received a special long-term new-hire award of 500,000 restricted stock units, valued at $26.2 million. Mack cannot sell the shares underlying the units until they vest, which generally will not happen until Mack is no longer CEO. In February, Morgan Stanley disclosed it awarded Mack $13 million in cash, stock and other compensation for his first five months of work, as reward for his role restoring order at the investment bank. Morgan Stanley's shares, which closed Thursday at $79.60, have risen about 40 percent so far this year, outperforming a 23 percent rise in the Amex Securities Dealers index. http://money.cnn.com/2006/12/15/news/newsm...sion=2006121507 Quote Link to comment Share on other sites More sharing options...
J Larsen Posted January 4, 2007 Report Share Posted January 4, 2007 These execs aren't even getting the biggest bonuses on Wall Street. A few years ago I heard reliable rumors that a trader at a major i-bank received an $80 million bonus. Also, nine figure bonuses are not unheard of for elite hedge fund managers. Quote Link to comment Share on other sites More sharing options...
Joe G Posted January 4, 2007 Report Share Posted January 4, 2007 Hell, I guess you don't even have to perform well. Home Depot just gave their CEO $210 million to go away. Home Depot's Nardelli Ousted After Six-Year Tenure (Update9) By Mark Clothier Jan. 3 (Bloomberg) -- Home Depot Inc., the world's largest home-improvement retailer, ousted Chief Executive Officer Robert Nardelli after investors criticized him for earning $225 million while the company's stock fell during his six-year tenure. Home Depot invited further criticism by sending Nardelli, 58, off with $210 million as part of his separation package, including compensation and benefits earned but not yet received. Vice Chairman Frank Blake, 57, will replace Nardelli immediately, the company said in a statement. Home Depot lost market share to Lowe's Cos. since Nardelli started in December 2000, and the shares declined 7.9 percent. The Atlanta-based company is headed for its smallest annual gain in profit in at least nine years. James Kunstler asks, "...how exactly does one's standard of living improve after, say, the first $140 million? How many private jet planes does it take to summon up that certain glow of contentment achieved among the testosterone-for-lunch-bunch? " Quote Link to comment Share on other sites More sharing options...
J Larsen Posted January 4, 2007 Report Share Posted January 4, 2007 Yes, I should have added that those hedge fund managers often get 8 figure bonuses even when they underperform the market. Quote Link to comment Share on other sites More sharing options...
Big Wheel Posted January 4, 2007 Report Share Posted January 4, 2007 Admittedly I don't have too much firsthand knowledge of investment banks, but I think the amount given to Mack probably has something to do with the company's recent turmoil. It's the company's way of putting an exclamation point on the fact that the Mack loyalists won the battle and the company survived. So they're just giving an extra middle finger to Phil Purcell's allies. Quote Link to comment Share on other sites More sharing options...
Jim Alfredson Posted January 4, 2007 Report Share Posted January 4, 2007 And here I am worrying about $400. I'm in the wrong business. Quote Link to comment Share on other sites More sharing options...
Jazzmoose Posted January 4, 2007 Report Share Posted January 4, 2007 Hell, I guess you don't even have to perform well. Home Depot just gave their CEO $210 million to go away. Frankly, given the performance of this idiot, it may be $210 mil well spent... Quote Link to comment Share on other sites More sharing options...
Uncle Skid Posted January 4, 2007 Report Share Posted January 4, 2007 Hell, I guess you don't even have to perform well. Home Depot just gave their CEO $210 million to go away. Frankly, given the performance of this idiot, it may be $210 mil well spent... Probably, but it really makes me wonder about the opportunity costs of that money, especially to Home Depot's employees. $210 million could go a long way for better health insurance benefits, increased hourly pay, etc. And just imagine what it could do for employee morale! I realize he probably negotiated all of this before he was hired, but does he really need another plane? Quote Link to comment Share on other sites More sharing options...
JSngry Posted January 4, 2007 Report Share Posted January 4, 2007 Did somebody say, "WAKE UP!"? I believe they did... Quote Link to comment Share on other sites More sharing options...
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