Don't cry for Philip Purcell, the ousted
As a going-away present, Morgan Stanley will give Purcell a massive "bonus payment" in the neighborhood of $44 million. The bonus, which will be paid out over the next two years, could be a bit higher or lower depending on the Wall Street firm's earnings, according to a regulatory filing.
That seems like a pretty nice parting gift for a guy who left last month mostly to quell a staff rebellion. But wait, there's more.
For the rest of his life, Purcell will receive $250,000 on each anniversary of his June 30 termination. The annual payments are "in lieu of benefits" Purcell otherwise would have received, Morgan says.
Additionally, beginning next year, Morgan Stanley will make a $250,000 annual contribution to a charity of Purcell's choice.
Purcell, however, will forfeit his right to the bonus and lifetime payments if he takes a job with a competitor.
News of the outsized golden parachute for Purcell comes just days after Morgan Stanley said it is guaranteeing $25 million a year for successor John Mack for the next two years. Mack, who four years ago lost out to Purcell in an internal power struggle, has returned to replace Purcell.
Meanwhile, Morgan Stanley also announced that it has entered into big multimillion-dollar compensation deals with two other top executives who were seen as allies of Purcell. The deals would make it costly for Mack to replace the executives.
The first deal is with Stephen Crawford, who was recently named co-president of the firm by Purcell. The agreement provides that over coming years, the value of Crawford's total compensation package will equal at least $16 million annually. If Crawford is asked by the company to leave before two years are up, he will be entitled to receive a substantial portion of the money promised to him.
The firm entered into a similar deal with David Sidwell, Morgan Stanley's chief financial officer. But that pact is shorter. The firm agreed to pay Sidwell at least $10.5 million in total compensation, "subject to his continued employment with the Company through October 15, 2005."
Curiously, Morgan Stanley did not announce any compensation deal with Zoe Cruz, the firm's other co-president and another executive close to Purcell.
There has been some speculation that Mack may have to replace Cruz if he is going to woo back a number of former Morgan Stanley employees. A number of those employees left in a huff after Purcell promoted Cruz and Crawford.
The internal uproar over the promotions provided ammunition to a group of Morgan Stanley alumni who had been calling for Purcell's ouster.
When Mack was named the new leader of Morgan Stanley, he said he supported both Cruz and Crawford. But at the same time, the two co-presidents announced they were resigning from the firm's board -- posts Purcell had awarded them just months earlier.