John Mack, Morgan Stanley’s outgoing chief executive, will forgo a bonus for the third year in a row as his bank heads for its first annual loss.
The move reflects Wall Street’s cognizance of public backlash over compensation. In a memo to employees, Mack said the industry must work to better align executive compensation with long-term performance.
Morgan Stanley was one of hundreds of U.S. banks that received assistance through the Troubled Asset Relief Program to help it manage through last fall's credit crisis. Morgan Stanley repaid the $10 billion it owed the government in June.
The Associated Press reports Mack said financial firms cannot ignore the lessons of the market crisis, and called for more regulatory reform, including efforts to better align executive compensation with long-term performance.
Mack will step down as CEO on Jan. 1, but will remain at the company as chairman. He is being succeeded by co-president James Gorman.