NEW YORK: Morgan Stanley paid $35 million (Rs154 crores) to Neal Shear, the co-head of trading, making him the firm’s second highest-paid manager in 2006 after Chairman and Chief Executive Officer John Mack.
Shear, 53, was awarded more than Co-President Zoe Cruz, his boss, who received $30 million, the New York-based firm said in a proxy filing today with the US Securities and Exchange Commission. Morgan Stanley, the world’s second-biggest securities firm, disclosed in December that it paid $41.4 million to Mack.
Wall Street firms, including Morgan Stanley, generated record profits last year. Shear, whose background is in debt and commodities, oversaw a 41% increase in fixed-income sales and trading to a record $9.6 billion, Morgan Stanley’s biggest single revenue line.
“Fixed-income trading was a very profitable place to be in 2006,” said Kenneth Crawford, who helps manage $750 million, including Morgan Stanley shares, at Argent Capital Management in St. Louis. “The company is paying those sources that drove some of their very good returns.”
Shear received a $12.1 million cash bonus, $20.3 million in restricted stock, stock options valued at $2.3 million and a $300,000 salary, His compensation compared with $20.1 million paid to Jerker Johansson, 51, the other trading co-head, whose background is in equities.
Morgan Stanley paid Co-Presidents Cruz, 52, and Robert Scully, 57, different amounts for 2006. Cruz, who previously ran fixed-income trading, was granted $30 million, including $10.3 million in cash, $17.3 million in restricted stock, $1.9 million in options and a $500,000 salary. Scully, 57, was awarded $20.1 million, including a $6.9 million cash bonus, $11.6 million in restricted stock, $1.3 million in options and a $250,000 salary, the filing showed.
Mack’s 2006 pay package set a Wall Street record that was eclipsed four days later when Goldman Sachs Group Inc., the world’s biggest securities firm, granted Chairman and CEO Lloyd Blankfein a $54 million pay package.
Shares of Morgan Stanley rose 44% in 2006 as the firm’s net income climbed 51% to $7.47 billion on a 26% gain in revenue. The firm trailed Goldman Sachs, where profit grew 70% and the shares rose 56%.
Morgan Stanley will hold its annual shareholder meeting on 10 April, according to today’s filing.