This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Mack's Mandatory Minimums

John Mack is Morgan Stanley's (MWD) new $25 million man.

Over the next two years, the big Wall Street firm will pay its new leader a minimum "guaranteed" compensation package of $25 million, according to a regulatory filing.

The only way Mack's minimum pay package will be less than $25 million is if the average pay packages for his Wall Street peers is less than that sum. In other words, if the CEOs of Bear Stearns (BSC), Lehman Brothers (LEH), Goldman Sachs (GS) and Merrill Lynch (MER) make less than $25 million, Morgan Stanley will make a downward adjustment in Mack's minimum pay package.

At the same time, if the average pay for Mack's rivals exceeds $25 million, Morgan Stanley will cap Mack's "guaranteed minimum total compensation" at $25 million.

On Wall Street, that's what they call price controls.

Of course, we're talking a minimum pay package here. So it's entirely possible Mack's total take-home package could be much more.

Even though it's a five-year deal, Morgan Stanley will guarantee the size of Mack's pay package only through 2006. After that, how much Mack earns will be at the total discretion of the board.

Last week, Morgan Stanley journeyed back to the future to tap Mack as chairman and CEO to replace Philip Purcell. Mack had been the firm's former president who was ousted in 2001 during a power struggle with Purcell.

In addition to the guaranteed salary, Mack also is getting 500,000 restricted stock units, which will vest and be paid in five installments. Restricted stock has become a popular way for Wall Street to reward executives.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $132.65 0.00%
FB $81.91 0.00%
GOOG $555.37 0.00%
TSLA $231.55 0.00%
YHOO $44.36 0.00%

Markets

DOW 18,037.97 -42.17 -0.23%
S&P 500 2,108.92 -8.77 -0.41%
NASDAQ 5,060.2460 -31.8390 -0.63%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs