Morgan's Mack sees hefty pay raise

NEW YORK (CNNMoney.com) -- Morgan Stanley boss John Mack, who was ousted from the company in a bitter power struggle in 2001 only to fight his way back to its top spot in 2005, took home $41.4 million in 2006, a raise of about 38 percent, according to the company's proxy statement issued Friday.

Mack's overall payout, which included things like salary, stock options, bonuses and other perks, was about three times larger than the average head of a Fortune 500 company - $13.5 million, according to research firm the Corporate Library's 2005 figure.

Morgan Stanley chief executive John Mack

But the compensation package was in-line with one of Morgan Stanley's (Charts) chief competitors, Goldman Sachs (Charts), and well below its other main competitor Lehman Brothers (Charts).

Goldman paid its chief executive $43.8 million in 2006, while Lehman doled out $104 million in 2005, according to the Corporate Library.

Mack's 2006 package included a base salary of $800,000, restricted stock awards of about $36.2 million, other stock options of $4 million, use of company aircraft valued at $321,848, other compensation of $15,447, pension benefits valued at $67,963, and $6,100 in matching 401(k) money.

Mack's immediate subordinates also saw similar hikes in total compensation, with Co-President Zoe Cruz making about $30 million, Co-President Robert Scully taking home $20 million, Jerker Johansson making 20.1 million and Neal Shear making about $35 million.

The pay raise coincided with record earnings at investment banks in general in 2006 as a bevy of mergers and trading boosted profits.

That helped create tremendous value for shareholders, and Morgan Stanley stock is up over 30 percent in the last year.

But high executive compensation has also been criticized as the gap between the very rich and everyone else widens in the United States.

The median household income in the U.S. in 2005 was $46,242, up 3.4 percent from 2004, according to the Census Bureau.

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(Correction: An earlier version of this story misstated when Mack was ousted from Morgan Stanley. CNNMoney.com regrets the error).