Shareholder Suit re 'Staggering' Pay Says Morgan Stanley Is Run for Employees' Benefit
Two pension funds have filed suit against the world’s biggest brokerage, seeking billions in restitution and contending that Morgan Stanley paid out “staggering” compensation and bonuses to its employees in 2006, 2007 and 2009 without regard to the interests of its shareholders.
“The payments are staggering not only in absolute and percentage terms, but also when one considers the losses suffered by Morgan Stanley’s shareholders between 2006 and 2009,” says the complaint filed today in Manhattan Supreme Court by Grant & Eisenhofer. Alleging that the defendants “operated the company principally for the benefit of its employees,” it seeks disgorgement and restitution of an unspecified amount of billions, reports Bloomberg.
In addition to the company, the defendants also include Chairman John Mack and President and CEO James Gorman. The suit asserts claims for breach of fiduciary duty and unjust enrichment. In addition to damages, it seeks reform of the investment bank’s pay practices, contending that they represent a waste of corporate assets, Reuters reports.
A Morgan Stanley spokesman declined the news agencies’ requests for comment.
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