By Elizabeth Dilts Marshall

NEW YORK (Reuters) – Morgan Stanley (N:) Chief Executive James Gorman is receiving $27 million (20.75 million pounds) in total compensation in 2019, nearly 7% less than what he got the year before, the company said in a filing on Friday, following a reduction of bonuses staff-wide.

The board, which decides the top executives’ pay, called the 61-year-old’s performance in the year “outstanding” and acknowledged “the firm’s strong financial performance.” The bank’s reported profit jumped 46% to $2.09 billion in 2019 compared to 2018.

That kind of out-performance would typically result in the board giving the CEO a big raise. However, a source familiar with the board’s thinking said members also considered the bank’s recent disclosure that it would cut staff and discretionary compensation as it aimed to further reduce expenses.

In the bank’s fourth quarter earnings on Thursday it said it was lowering 2019 bonuses staff-wide in an effort to offset a 7% increase in other compensation expenses.

Morgan Stanley also disclosed it paid $172 million in severance packages to terminated employees, many of whom worked at the investment bank and trading business. The bank said in December that it would cut about 1,500 employees, or roughly 2% of its global workforce.(

Gorman’s compensation is comprised of four parts: a base salary of $1.5 million; a cash bonus of $6.375 million; a deferred equity award of $6.375 million; and a performance-vested equity award of $12.75 million.

The board again required that 75% of Gorman’s incentive compensation be deferred over three years subject to a claw-back, and for all of that compensation to be paid in the form of equity in the company.

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