NEW YORK (
Chairman John Mack, CEO James Gorman and other top executives successfully fended off a shareholder lawsuit which had challenged the bank's payment of $45 billion over three years to its employees,
Judge Shirley Werner Kornreich dismissed the suit, arguing the shareholders should have taken their concerns to Morgan Stanley's board, or to show that making such a demand would have had no possibility of success.
The complaint failed to prove objecting to the board over employee pay would have been futile, according to the
report, which cites Kornreich's opinion.
"There is no reasonable doubt that the respective board approvals were not a valid exercise of business judgement," Kornreich wrote.
The lawsuit, brought by a shareholder group that included the Security, Police and Fire Professionals of America Retirement Fund, argues Morgan Stanley pay packages in 2006, 2007 and 2009 were "unconscionable," in light of the bank's weak performance, Bloomberg writes.
Written by Dan Freed in New York
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