NEW YORK -- The outrage over Wall Street bonuses has claimed its latest victim.
"Given this unprecedented environment and the extraordinary financial support governments provided to our industry, as the leader of this Firm, I recommended to the Compensation Committee of the Board last week that I receive no year-end bonus," Mack wrote in a memo to employees.
The outgoing bank chief did not directly cite the public outrage over Wall Street bonuses, although the subject has been a topic very much in focus for bankers these days.
Many Americans have been up in arms over the prospect that some large financial firms are poised to pay out billions of dollars in bonuses in 2009, after being rescued by taxpayers a little more than a year ago.
Hoping to quell some of that indignation, Wall Street has launched a number of initiatives recently. Morgan Stanley's crosstown rival Goldman Sachs (GS, Fortune 500), for example, announced earlier this month it would not pay cash bonuses to its top executives.
Mack's decision is probably also tied to with the company's broader performance. Unlike some of its peers, Morgan Stanley is currently expected to finish the year in the red, losing some $388 million, according to Thomson Reuters.
Morgan Stanley received $10 billion in funds under the Troubled Asset Relief Program, or TARP, which it repaid in July.
This would mark the third year in a row that Mack has not accepted any sort of a bonus payment.
In 2006, he decided to forgo the cash component of his bonus, but still received stock and options. That payment was worth an estimated $40.2 million, roughly 50 times greater than his $800,000 base pay.
Mack is due to step down at the end of the year as chief executive officer but will remain on as the firm's chairman. Company co-president James Gorman was named as his successor to the CEO post in September.
Mack also told employees Friday that the company was making some adjustments to how they will be paid. In an effort to align pay with the long-term success of the firm, a greater portion of their compensation would come in the form of company stock rather than cash.
Like other Wall Street firms, Morgan Stanley has been implementing a number of changes to its compensation practices recently.
Earlier this year, the company declared plans to award a larger portion of annual bonuses in the form of stock instead of cash, since changes in the stock price would more closely mirror the firm's overall performance.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.30%||4.25%|
|15 yr fixed||3.29%||3.32%|
|30 yr refi||4.27%||4.20%|
|15 yr refi||3.26%||3.24%|
Today's featured rates:
Corporate inversions are on the rise. A U.S. company can greatly lower its tax bill by merging with a foreign firm and legally moving its headquarters abroad. Lawmakers from both parties are unhappy with the trend and want to change the rules. In the meantime, some are saying the move is unpatriotic. More
Apple is facing a class-action lawsuit from employees who say they were denied meal breaks and rest periods. More
As 65,000 IDF reservists are tapped to serve in Gaza, Israeli's tech community tries to maintain business as usual, amidst bombs, sirens and employees called to war. More