[ by Melanie Gretchen ]

Morgan Stanley CEO James Gorman is expected to take his second annual pay cut in as many years, following the firm's mixed financial performance in 2012.  For 2011, Mr. Gorman took home $10.5 million, a 25% drop from the previous year. 

The Numbers: What Mr. Gorman Can Look Forward To.   While the specific value of his 2012 compensation is not known, it is known that the chief will not be going home empty-handed.  So far, he's earned the following:

• Base salary of $800,000
• Stock awards valued at $2.6 million
• Deferred cash totaling $2.6 million

Factoring into Mr. Gorman's pay is the fact that Morgan Stanley's stock increased 26% to $19.12 and its Q4 earnings exceeded expectations.  Drawing the CEO's pay down are the firm's return on shareholder equity - which was only 5% for year, vs. Goldman Sachs's return of 10.7%) - and the firm's struggles in fixed-income.  Going forward, Mr. Gorman's stock options give him the right to buy Morgan Stanley shares in the future at a preset price, an opportunity as worthless of the value of the options if the company's shares fell below that price, thus tying his performance to that of the company's.

[C-I Note: Talk about having skin in the game.]

For further details, go to [Dealbook, 1/24/13].