Morgan Stanley · NYSE:MS
Morgan Stanley — Shareholder Meeting (April 2021)
21 slides from Morgan Stanley's shareholder meeting presentation, Apr 1, 2021
Slide 1: Morgan Stanley Compensation & Governance Practices
Morgan Stanley Compensation & Governance Practices April 2021
Slide 2: Board Recommends Shareholders Vote For Four Management Proposals
MORGAN STANLEY’S BOARD OF DIRECTORS RECOMMENDS SHAREHOLDERS VOTE: • FOR: Four Management Proposals 1 Approve the compensation of named executive officers (Say on Pay non-binding advisory vote) – At the start of 2020, the Compensation, Management Development and Succession (CMDS) Committee establishe
Slide 3: Board Recommends Shareholders Vote For Four Management Proposals (cont'd)
MORGAN STANLEY’S BOARD OF DIRECTORS RECOMMENDS SHAREHOLDERS VOTE: • FOR: Four Management Proposals (cont'd) 2 Approve the amended and restated Equity Incentive Compensation Plan (EICP) to (i) increase shares available by 60 million shares, (ii) extend the term by an additional five years, and (iii)
Slide 4: Our Business Model Performed and Delivered Record Results
OUR BUSINESS MODEL PERFORMED AND DELIVERED RECORD RESULTS 2010 – 2014 2015 – 2019 2020 Adjusted Year Ended December 31, 2014(1) Year Ended December 31, 2019 Year Ended December 31, 2020(2) Net Revenues $34Bn $41Bn $48Bn Efficiency Ratio(3) 79% 73% 70% Net Income(4) $4.5Bn $9.0Bn $11.0Bn Firm 7.5% 13
Slide 5: Strategic Transformation and Acceleration of Growth
STRATEGIC TRANSFORMATION AND ACCELERATION OF GROWTH Opportunistic Acquisitions: Emphasis on Balance Sheet Light Sources of Revenue and Growth (2009) (2017) (2019) (2020) (2020)* Establish Scale in Enhance Service Full Deepen Create Leading Wealth Workplace Spectrum of Alternatives Asset Manager Mana
Slide 6: Execution of Strategic Objectives Generates Consistent Shareholder Return
EXECUTION OF STRATEGIC OBJECTIVES GENERATES CONSISTENT SHAREHOLDER RETURN 1-Year (2020) TSR(1)(2) 3-Year (2018-2020) TSR(1)(2)(3) 5-Year (2016-2020) TSR(1)(2)(4) Morgan Stanley Ranked #1 out of 9 Across All Time Periods During 2020, share price increased by 34% from $51.12 to $68.53 and market cap i
Slide 7: Well-Positioned to Return Excess Capital
WELL-POSITIONED TO RETURN EXCESS CAPITAL Delivered Robust Returns Despite Excess Capital ROTCE (%)(1) Common Equity Tier 1 Ratio(4) ROE (%)(2) MS Ranked #1 vs. Global Peers(3) 17.4% 16.7% 16.9% 15.4% ex. 15.2% integration expenses 13.5% CET1 Requirement 13.3% ex. with SCB: 13.1% integration 13.2% ex
Slide 8: CEO Leadership During Challenging Backdrop
CEO LEADERSHIP DURING CHALLENGING BACKDROP Focus on employees and communities while continuing to strengthen diversity and inclusion DIVERSITY Established the Institute for Inclusion, a Firm-wide effort to Value diverse perspectives and invest in underserved communities, advance equity through creat
Slide 9: Compensation Program Objectives and Features
COMPENSATION PROGRAM OBJECTIVES AND FEATURES Morgan Stanley has a pay for performance philosophy for its named executive officers, and is committed to responsible compensation pro- grams with the following key objectives, all of which support the Firm’s culture and values and shareholders’ interests
Slide 10: Framework for Determining CEO Compensation
FRAMEWORK FOR DETERMINING CEO COMPENSATION Morgan Stanley has a robust process that supports and reinforces the pay for performance philosophy that incorporates the following key steps: 1 2 3 4 Establish Target Set Performance Priorities Assess Performance Determine Compensation Compensation Range I
Slide 11: Annual Performance Priorities
ANNUAL PERFORMANCE PRIORITIES Each year, the CMDS Committee and Board set performance priorities with Management. Performance against these quantitative and qualitative measures inform executive compensation decisions Quantitative Qualitative Firm financial performance Firm risk management and contr
Slide 12: CEO Compensation Determination
CEO COMPENSATION DETERMINATION At year end, the CMDS Committee assessed CEO and Firm performance, discussed that assessment with the Board, and established 2020 CEO compensation MS 2020 Performance Evaluation 2020 CEO Compensation Elements ($MM) % of Incentive $33MM Compensation + Record financial p
Slide 13: Overview of EICP Proposal
OVERVIEW OF EICP PROPOSAL • The Board of Directors recommends: – Adding 60 million shares to the EICP Proposal – Extending the term of the EICP for an additional 5 years – Removing references to Section 162(m) of the Internal Revenue Code that have become obsolete as a result of the Tax Cuts and Job
Slide 14: Committed to Maintaining Best in Class Governance
COMMITTED TO MAINTAINING BEST IN CLASS GOVERNANCE Key Corporate Governance Practices Value and Shareholder Committed to Robust Board Annual Board Respond to Rights and Sustainability and Oversight of Evaluation Shareholder Accountability Giving Back Feedback • Firm’s strategy, One-on-one interviews
Slide 15: Board of Directors Has Relevant and Diverse Experience
BOARD OF DIRECTORS HAS RELEVANT AND DIVERSE EXPERIENCE Board Tenure Balance Board Independence Average Tenure: 5 years All members of all committees are non-management, and the Board benefits from an engaged Independent Lead Director (1) with expansive 10 years +: 1 responsibilities Management: 1 5-
Slide 16: Independent Board Leadership and Board Refreshment
INDEPENDENT BOARD LEADERSHIP AND BOARD REFRESHMENT James Gorman (62) Nobuyuki Hirano (69) Dennis M. Nally (68) Tenure: 11 Years Tenure: 6 Years* Tenure: 4 Years • Chairman of the Board • Previously Chairman of Mitsubishi • Previously Chairman of • Previously President of MS, President UFJ Financial
Slide 17: End Notes
END NOTES The following notes are an integral part of the Firm’s financial and operating performance described in this presentation: General • A detailed analysis of the Firm’s financial and operational performance for 2020 is contained in Management’s Discussion and Analysis of Financial Condition
Slide 18: End Notes (continued)
END NOTES (CONTINUED) Page 4 (continued) 2. The comparisons of current and prior periods are impacted by the financial results of E*TRADE reported in the Wealth Management Segment. The Firm’s fourth quarter earnings results reflect the completed acquisition of E*TRADE Financial Corporation (‘E*TRADE
Slide 19: End Notes (continued)
END NOTES (CONTINUED) Page 7 1. The calculation of ROTCE for each year utilizes net income applicable to Morgan Stanley less preferred dividends as a percentage of average tangible common equity. Average tangible common equity represents average common equity adjusted to exclude goodwill and intangi
Slide 20: End Notes (continued)
END NOTES (CONTINUED) Page 15 1. As part of his or her formal duties and responsibilities, the Independent Lead Director shall: – Preside at all meetings of the Board at which the Chairman is not present; – Have the authority to call, and lead, Non-Management Director Sessions and Independent Direct
Slide 21: Notice
NOTICE The information provided herein may include certain non-GAAP financial measures. The definition of such financial measures and/or the reconciliation of such measures to the comparable GAAP figures are included in the Firm’s Annual Report on Form 10-K for the year ended December 31, 2020, whic