Morgan Stanley · NYSE:MS
Morgan Stanley — Shareholder Meeting (April 2023)
26 slides from Morgan Stanley's shareholder meeting presentation, Apr 6, 2023
Slide 1: Morgan Stanley Compensation & Governance Practices
Morgan Stanley Compensation & Governance Practices April 2023
Slide 2: Board of Directors Recommends Shareholders Vote (FOR)
Morgan Stanley’s Board of Directors Recommends Shareholders Vote: • FOR: Four Management Proposals (1) 1– Approve the compensation of Named Executive Officers (Say on Pay Non-Binding Advisory Vote) • Based on outstanding individual performance and solid financial performance in 2022, total CEO compe
Slide 3: Board of Directors Recommends Shareholders Vote (continued)
Morgan Stanley’s Board of Directors Recommends Shareholders Vote: • FOR: Four Management Proposals (continued) 2• Approve Holding the Say on Pay Vote Annually (non-binding advisory vote) 3• Elect all Director Nominees 4• Ratify Deloitte & Touche LLP’s Appointment as the Firm’s Independent Auditor •
Slide 4: Our Business Model Performed as Designed and Continued to Deliver Solid Results
Our Business Model Performed as Designed and Continued to Deliver Solid Results 2019 2020 2021 2022 As reported As reported As reported As reported Net Revenues $41.5Bn $48.8Bn $59.8Bn $53.7Bn Efficiency Ratio 72% 69% 67% 73% Net Income $9.0Bn $11.0Bn $15.0Bn $11.0Bn FIRM EPS (1) $5.19 $6.46 $8.03 $
Slide 5: Strength of Business Model Tested in a Challenging Year
Strength of Business Model Tested in a Challenging Year What Happened in 2022 How We Did in 2022 (1) • Highest inflation in 40 years • 16% ROTCE, excluding integration-related expenses • 15.3% CET1 Ratio • Fastest rate increases in 40 years • $54Bn in Net Revenues • Tail end of worst pandemic in 100
Slide 6: Delivered Solid Results in 2022 and Reaffirmed Performance Goals
Delivered Solid Results in 2022 and Reaffirmed Performance Goals 2022 Results ROTCE 15.3% Efficiency Ratio 73% WM Pre-Tax Margin 27.0% Performance Goals To Support Longer-Term Objectives (1) ROTCE Efficiency Ratio WM Pre-Tax WM Net New Longer-Term Margin Assets Goal 20%+ <70% 30%+ $1 Trillion $10 Tr
Slide 7: Maintained Strength in ISG with Continued Transformative Growth in WM and IM
Maintained Strength in ISG with Continued Transformative Growth in WM and IM Strong Leadership Added ~$1Tn of NNA Growth in Fee-Based in ISG in Last 3 Years in WM Revenues in IM 2022 Wallet Share (%) (1) Net New Assets ($Bn) (2) AM and Related Fees ($Bn) (3) 5.3 ~20% Equities 981 Investment ~15% Ban
Slide 8: Generating Consistently Stronger Shareholder Returns Relative to Peers
Generating Consistently Stronger Shareholder Returns Relative to Peers, Even in a Challenging Year (1)(2)(3) (1)(2)(4) 1-Year (2022) TSR 3-Year (2020-2022) TSR 5-Year (2018-2022) TSR (1)(2)(5) Top Relative Performance by MS vs. Peer Average and Market Across All Time Periods During 2022, Morgan Stan
Slide 9: Ongoing Commitment to Dividend and Buyback
Ongoing Commitment to Dividend and Buyback ~3% Dividend Yield and ~6% Buyback While Maintaining Excess Capital Continued to Increase Dividend Continued to Reduce Share Count Maintained Excess Capital 4Q Dividend Per Share ($) (1) Shares Outstanding (Bn) (2) CET1 Ratio (%) (4) 2.0 ~200 bps 0.775 +302
Slide 10: Supporting our Employees and Communities with a Continued Focus on Diversity and Inclusion
Supporting our Employees and Communities with a Continued Focus on Diversity and Inclusion CULTURE Continued to drive strong organizational culture and client Our culture guides our employees, and engagement through the Firm’s Core Values: Do the Right our values inform everything we do Thing, Put
Slide 11: Compensation Program Objectives and Features
Compensation Program Objectives and Features Morgan Stanley has a pay for performance philosophy, and is committed to responsible compensation programs with the following key objectives, all of which support the Firm’s culture and values and shareholders’ interests Key Objectives Key Features Defe
Slide 12: 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: Set Performance Establish Target Assess Determine Priorities Compensation Range Performance Compensation In the co
Slide 13: 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 14: 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 2022 CEO compensation 2022 Performance Evaluation 2022 CEO Compensation Elements ($MM) + Solid financial performance in 2022 % of Incentive Comp
Slide 15: Committed to Maintaining Best in Class Governance
Committed to Maintaining Best in Class Governance Key Corporate Governance Practices ROBUST BOARD ANNUAL BOARD SHAREHOLDER RIGHTS COMMITTED TO VALUE AND RESPOND TO OVERSIGHT EVALUATION AND ACCOUNTABILITY SUSTAINABILITY SHAREHOLDER FEEDBACK • Firm’s strategy, including • One-on-one interviews • Adopt
Slide 16: Board of Directors Has Relevant and Diverse Experience
Board of Directors Has Relevant and Diverse Experience Board Tenure Balance Board Independence Average Tenure: 6.4 years All members of all committees are non-management, and the Board benefits from an engaged Independent Lead Director (1) with 10 years +: expansive responsibilities Management: 3 1
Slide 17: Independent Board Leadership and Board Refreshment
Independent Board Leadership and Board Refreshment James Gorman (64) Hironori Kamezawa (61) Dennis M. Nally (70) Tenure: 13 Years Tenure: 2 Years CMDS Chair • Chairman of the Board and CEO of MS • Currently President and Group CEO of MUFG Tenure: 6 Years • Previously President of MS, Co-Head of and
Slide 18: Morgan Stanley Has a Clear Climate Transition Path
Morgan Stanley Has a Clear Climate Transition Path Morgan Stanley’s public commitments to a low carbon economy are supported by robust governance and transparent disclosures Our Public Commitments Governance and Disclosure • Achieve net-zero financed emissions by 2050 Our Board oversees our policies
Slide 19: Vote AGAINST Proposal on Right to Call a Special Meeting (1/2)
Our Board Recommends Shareholders Vote AGAINST Proposal Requesting Adoption of Improved Shareholder Right to Call a Special Shareholder Meeting (1/2) • Responsive to a prior proposal submitted by the proponent, our Board has already approved amendments to our Bylaws to provide that owners of at leas
Slide 20: Vote AGAINST Proposal on Right to Call a Special Meeting (2/2)
Our Board Recommends Shareholders Vote AGAINST Proposal Requesting Adoption of Improved Shareholder Right to Call a Special Shareholder Meeting (2/2) • Our Board believes that allowing owners of at least 25% of our common stock to call a special meeting strikes the right balance between providing an
Slide 21: Vote AGAINST Proposal to Cease Financing New Fossil Fuel Development (1/2)
Our Board Recommends Shareholders Vote AGAINST Proposal Requesting Adoption of a Policy to Cease Financing New Fossil Fuel Development (1/2) • A similar proposal asking the Board to adopt a policy by the end of 2022 committing to proactive measures to ensure that the Company’s lending and underwriti
Slide 22: Vote AGAINST Proposal to Cease Financing New Fossil Fuel Development (2/2)
Our Board Recommends Shareholders Vote AGAINST Proposal Requesting Adoption of a Policy to Cease Financing New Fossil Fuel Development (2/2) • Our Board oversees Morgan Stanley’s policies with respect to emissions-intensive sectors, including as outlined in our Environmental and Social Policy Statem
Slide 23: End Notes
End Notes These notes refer to the financial metrics and/or defined term presented on Slide 2 1. Stated metrics are for full-year 2022. The expense efficiency ratio (‘Efficiency Ratio’) represents total non-interest expenses as a percentage of net revenues. Net Income represents net income applicabl
Slide 24: End Notes
End Notes These notes refer to the financial metrics and/or defined term presented on Slide 8 1. Total Shareholder Return represents the change in share price over a period of time plus the dividends paid during such period, expressed as a percentage of the share price at the beginning of such perio
Slide 25: End Notes
End Notes • Solicit the non-management directors for advice on agenda items for meetings of the Board and executive sessions to help facilitate Board focus on key issues and topics of interest to the Board; • Be available, if requested, to meet with the Firm's primary regulators; • Be available, if
Slide 26: 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, 2022, whic