Morgan Stanley · NYSE:MS
Morgan Stanley — Shareholder Meeting (April 2016)
19 slides from Morgan Stanley's shareholder meeting presentation, Apr 1, 2016
Slide 1: Morgan Stanley Compensation & Governance Practices
Morgan Stanley Compensation & Governance Practices April 2016
Slide 2: Executive Summary
EXECUTIVE SUMMARY Morgan Stanley’s Board of Directors unanimously recommends that shareholders vote: • FOR: Non-binding advisory vote approving compensation of named executive officers (“Say on Pay”) °° At the start of 2015, as in prior years, the Compensation, Management Development and Succession
Slide 3: Compensation Program Is Well Aligned With Best Practices
COMPENSATION PROGRAM IS WELL ALIGNED WITH BEST PRACTICES IN GOVERNANCE, RISK MANAGEMENT, AND REGULATORY PRINCIPLES Key Features of Compensation Program New Ownership Requirements 1. Deferred incentive compensation • Significant deferrals support retention objectives and mitigate excessive risk-takin
Slide 4: Framework for Determining CEO Pay
FRAMEWORK FOR DETERMINING CEO PAY Establish a Target Range of Compensation Determine Compensation Based on Performance • The CMDS Committee establishes the CEO target • The Board sets performance priorities (financial and compensation range at the beginning of each year non-financial) at the beginni
Slide 5: Morgan Stanley Continued to Make Progress on Strategic Objectives in 2015
MORGAN STANLEY CONTINUED TO MAKE PROGRESS ON IMPORTANT STRATEGIC OBJECTIVES IN 2015 1. Ongoing Wealth Management upside through additional • Achieved FY 2015 22% pre-tax margin, up from 20% in 2014(1) margin improvement • One of leading Wealth Management platforms with ~$2Tn in client assets and ~16
Slide 6: Morgan Stanley Has Demonstrated Continued Progress in Financial Performance
MORGAN STANLEY HAS DEMONSTRATED CONTINUED PROGRESS IN FINANCIAL PERFORMANCE... Morgan Stanley ROE (2011 – 2015)(1)(2) Reported 9% Ex-DVA 8% 5% 5% 5% 4% 4% 4% (0%) (0%) 2011 2012 2013 2014(3) 2015 % ∆ 2015 Firm Financials Results Ex-DVA ($Billion) 2011 2012 2013 2014(3) 2015 vs. 2014 Net Revenues(4)
Slide 7: Reported 2015 Return on Equity Is in Line With Peers
...AND REPORTED 2015 RETURN ON EQUITY IS IN LINE WITH PEERS 2015 ROE (As Externally Reported)(1) 12% 11% 9% 8% 7% 6% Credit Deutsche Barclays Suisse Bank UBS J.P. Morgan Morgan Citigroup Goldman Bank of Stanley Sachs America (1%) (7%) (10%) The End Notes are an integral part of this presentation. Se
Slide 8: MS Total Shareholder Return Trailed Peers in 2015, Ranked 1st 2013-2015
MS TOTAL SHAREHOLDER RETURN TRAILED PEERS IN 2015, BUT STILL RANKED 1ST AMONG PEERS OVER THE PERIOD 2013 – 2015 MS and Peer Total Shareholder Return(1)(2) 2015 2013-2015 UBS 19% MS 72% JPM 8% JPM 63% C (4)% BAC 48% BAC (5)% GS 47% GS (6)% UBS 45% DB (7)% C 31% BARC (8)% CS 9% CS (8)% BARC (3)% MS (1
Slide 9: 2015 CEO Compensation Based on CMDS Committee Assessment
2015 CEO COMPENSATION WAS BASED ON THE CMDS COMMITTEE’S ASSESSMENT OF CEO AND MORGAN STANLEY’S PERFORMANCE MS CEO Compensation Range Evaluating MS CEO Performance 2015 MS CEO Compensation Decision $28 Million or More $28 Million or More • CEO performance exceeds + Strong CEO performance Expected exp
Slide 10: 72% of 2015 CEO Compensation Deferred
72% OF 2015 CEO COMPENSATION DEFERRED; 39% OF DEFERRED COMPENSATION LINKED TO FUTURE PERFORMANCE MS 2015 CEO Compensation Elements $ Million % of Deferred % of Total $21.0 Million 39% 5.9 Performance-Vested Long-Term Incentive Compensation Performance- Vested • Realizable value determined after thre
Slide 11: Management Conducted Shareholder Outreach and Implemented Enhancements
MANAGEMENT CONDUCTED SHAREHOLDER OUTREACH AND IMPLEMENTED ENHANCEMENTS BASED ON FEEDBACK Shareholder Feedback Morgan Stanley Response • Generally supportive • Introduced minimum share ownership requirements Executive • Interested in minimum share for CEO and NEOs (10x and 6x base salary, 1 Compensat
Slide 12: Overview of EICP Proposal
OVERVIEW OF EICP PROPOSAL • The Board of Directors recommends: - Adding 20 million shares to the EICP Proposal - Adding regulatory factors, risk management, expense management, and contributions to community development or sustainability projects or initiatives as performance measures that could be
Slide 13: Board of Directors Has Relevant and Diverse Experience
MORGAN STANLEY’S BOARD OF DIRECTORS HAS RELEVANT AND DIVERSE EXPERIENCE (Year) = Year Director joined Board = New Director in 2015-2016 Board Members Select Experience (1) Board Members Select Experience(1) James Gorman • Previously President of MS, President of MS Wealth Jami Miscik • Currently Co-
Slide 14: Committed to Best-in-Class Governance Practices
MORGAN STANLEY IS COMMITTED TO MAINTAINING BEST-IN-CLASS GOVERNANCE PRACTICES – GOVERNANCE HIGHLIGHTS • Eight new directors since 2012 who bring new skills and perspective to the Board • Upon election at the annual meeting, the average Board tenure will be approximately 4.6 years Board Structure and
Slide 15: Vote Against Proposal to Exclude Abstain Votes
MORGAN STANLEY’S BOARD OF DIRECTORS RECOMMENDS SHAREHOLDERS VOTE AGAINST PROPOSAL TO EXCLUDE VOTES TO ABSTAIN FROM SHAREHOLDER PROPOSAL VOTE COUNTS Reasons to Vote “Against” • We clearly explain our vote counting standards in our proxy statement. Our methodology honors the intent of shareholders who
Slide 16: Vote Against Proposal on Vesting for Government Service
MORGAN STANLEY’S BOARD OF DIRECTORS RECOMMENDS SHAREHOLDERS VOTE AGAINST PROPOSAL TO ADOPT A POLICY TO PROHIBIT VESTING OF DEFERRED EQUITY AWARDS FOR SENIOR EXECUTIVES WHO RESIGN TO ENTER GOVERNMENT SERVICE Reasons to Vote “Against” • Vesting and payout of deferred compensation when an employee leav
Slide 17: End Notes
END NOTES The following notes are an integral part of the Company’s financial and operating performance described in this presentation: General • A detailed analysis of the Company’s financial and operational performance for 2015 is contained in the Management’s Discussion and Analysis of Financial
Slide 18: End Notes (Cont'd)
END NOTES (CONT’D) Page 6 1. The calculation of ROE uses net income applicable to Morgan Stanley less preferred dividends as a percentage of average common equity. To determine ROE, ex-DVA both the numerator and denominator were adjusted to exclude the impacts of DVA. ROE and ROE, ex-DVA are non-GAA
Slide 19: 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 Company’s Annual Report on Form 10-K for the year ended December 31, 2015, w