February 22, 2021

Financial Advisor IQ: ‘Peculiar Year’ for CEO Pay at Morgan Stanley, Wells, BofA: Comp Consultant

by Miriam Rozen

Morgan Stanley CEO James Gorman’s total direct compensation — his salary plus his cash bonus and long-term incentives — jumped 22% to $33 million, according to the bank’s Securities and Exchange Commission disclosure.

It was “a very interesting environment in banking because interest rates were so low, yet the stock market went down, and up again, and ended up being pretty robust,” says Robin Ferracone, CEO and founder of Farient Advisors, an executive compensation firm.

“Depending upon [a bank’s] business mix, you had very different outcomes. The companies that were geared as commercial banks had a lot of pressure because of the low interest rates, and then those organizations that were much more geared toward wealth management, like Morgan Stanley, did so well,” Ferracone says.

“Wealth management was a sector that held up and it held up because when the market went down, people needed to know what to do with their portfolios,” she says. But then when the markets rose, so did wealth management clients’ portfolios and fees paid, she adds.

But the Wells Fargo and BofA CEOs also received credit for working through the pandemic-related challenges of 2020, Ferracone says.

“They were doing really well on other things. They had to get a tremendous number of PPP [Paycheck Protection Program] loans written, and they had to, you know, close branches and keep people safe, and they had to still serve their customers, and they needed to do all the other things that they have on their agendas in terms of the health of the stakeholders,” she says.

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