Morgan Stanley CEO John Mack declines bonus for third year in a row

December 18, 2009 by · Leave a Comment
Filed under: Stock Market News 

It is refreshing to see a CEO that understands the unprecedented backstop put up by taxpayers to help a practically insolvent banking system.   John Mack is to be congratulated for taking this action and hopefully it will send the right message and maybe we can get a more humbled Wall Street that appreciated the early Christmas we provided them.  Happy Holidays John.

Morgan Stanley’s outgoing CEO John Mack has declined a bonus for the third year in a row.

In a memo sent to the investment bank’s employees on Friday, Mack said he recommended to the board last week that he receive no year-end bonus “given this unprecedented environment and the extraordinary financial support governments provided to our industry.”

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.

Mack said financial firms cannot ignore the lessons of the market crisis, and called for the need 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.’

Source:  AP

NY Federal Reserve makes Morgan Stanley coordinator for AIG IPO

July 20, 2009 by · Leave a Comment
Filed under: Industry News 

July 20 (Reuters) – The Federal Reserve Bank of New York has guaranteed Morgan Stanley a global coordinator’s role in any initial public offering (IPO) of American International Group  units, documents made public on the New York Fed website show.

According to the documents, Morgan Stanley will earn percentage fees from the NY Fed if AIG sells any of its businesses, in addition to an initial $4 million payment as an advisory fee and $2.5 million per quarter.

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4 U.S. Banks Repay $54.7 Billion in Tarp Bailout Funds

June 17, 2009 by · Leave a Comment
Filed under: Industry News 

This is a good sign, I am glad to see these fund get repaid back.  This is going to create pressure on the banks that do not have the ability to repay these government loans.  In a sense, this has now separated the banks into two categories (TARPed and Non-TARPed) and one categoery is clearly stronger than the other.  This should let the market now reward or punish the good and bad banks we have.

If you can not repay these loans then clearly you are currently in a weaker position than your rivals.  In the business of banking, 95% of the business is based on “trust” and “confidence” and when you are in short supply of both, then you usually go out of business.   I want too see only strong and prudent banks surviving.   I love good banks and despise bad ones.  In all my history on banking I have read, this is the way of the world and it should not change now.

News (Bloomberg):

JPMorgan Chase & Co. and four of the nation’s largest banks repaid $54.7 billion to the U.S. Treasury’s bailout fund in a step toward ridding themselves of government restrictions on lending and pay.

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