Give Morgan Stanley (NYSE: MS) CEO John Mack credit for honesty and character in the wake of a tough year for the company. Mr. Mack received a salary of just $800,000 for fiscal 2007 (WSJ subscription required), and no bonus -- at his own request. Since setting a high over more than $75 in April, shares of the investment bank have declined to $42, their lowest level since 2005, on large subprime write-downs.
Mr. Mack is to be commended for his character, but investors shouldn't lose sight of the real issue: paying $800,000 for an executive whose company lost more than $25 billion in market value in one year is hardly a bargain.
But it's good news compared to the CFO who took home an $11.7 million package for a year that was an abysmal failure. Politically, Mr. Mack's decision is a good one. It will assuage disgruntled investors and should keep him from joining the cadre of executives hauled before Congress to explain their huge pay packages that came right after huge write-downs.
Hopefully more executives will follow his lead. Even if it's largely a symbolic gesture, taking responsibility is nice to see, and has been tragically rare at the subprime-decimated investment banks.
Why do we have a weak dollar?
Holiday hiring slow for retailers
Closing Bell: What sell-off? (AIG, ABK, EPR, MBI, JAVA, ORCL, ERTS)
Reader Comments (Page 1 of 1)
2-16-2008 @ 2:21PM
doc said...
Mr. Mack is to be commended for his character, but investors shouldn't lose sight of the real issue: paying $800,000 for an executive whose company lost more than $25 billion in market value in one year is hardly a bargain.
it could be worse, at least that fruitcake gadling isn't the CEO
2-16-2008 @ 4:54PM
TheIOtherOne said...
Well shat.. He only earned 800k this year... POOR FAWKING HIM
2-23-2008 @ 10:30PM
JoeZ said...
John Mack sets the example for the rest of Wall StreetCEO's..and industry in general. The Firm did poorly and he shared personally in the stocks debacle in not only his 2007 compensation, but the millions of dollars in value for the Morgan stock and options held in his portfolio.
John Mack is not only an outstanding leader, he also happens to be an outstanding trader, understands what his traders are doing, and I would not be surprised to see billions of dollars MADE by Morgan traders in 2008.