Wall Street's pay crunch is squeezing some wallets harder than others.
J.P. Morgan Chase & Co. disclosed Friday that Chief Executive James Dimon received a 2011 stock bonus valued by the company at $17 million. That is the same as his 2010 award, despite a re cord profit last year at the New York financial-services company.
Morgan Stanley Chief Executive James Gorman, meanwhile, saw his 2011 stock-based pay fall by about half, to $5.1 million, as the securities firm's in come from continuing operations fell 7% from a year earlier and the company's shares lost more than a third of their value. The companies disclosed the numbers in Securities and Exchange Commission filings on Friday afternoon.
The numbers are the latest sign that giant banks and securities firms are tightening their rein on pay following a year of mostly disappointing financial performance and significant share-price declines. Across Wall Street, total compensation is expected to be the lowest since the 2008 financial crisis, thanks to declining revenue and uncertainty over the e conomic, financial-market and regulatory environments. The pullback comes at a time when public sentiment against large pay packages is mounting amid protests such as the Occupy Wall Street encampment in New York.
Ac cording to its filing, J.P. Morgan granted its boss restricted stock valued by the company at roughly $12 million. Dimon also received stock appreciation rights worth an estimated $5 million based on the Black-Scholes options-pricing model.
J.P. Morgan Chase hasn't yet disclosed the cash portion of Dimon's bonus, but a person close to the company said it will fall by $500,000 from the $5 million awarded a year ago. His base salary in 2011 rose by the same amount, to $1.5 million, and total compensation for the year will be $23 million - equal to 2010.
Gorman's total pay for 2011, including salary, a deferred cash bonus and stock-based pay, will fall to $10.5 million from $14 million a year earlier, ac cording to a spokeswoman for the firm. In 2010, he received a $10.2 million stock-and-options package, ac cording to a proxy filing last year.
Dimon's Stock Bonus
Dimon's stock bonus tops those so far given out to Dimon's banking peers. Citigroup Inc. Chief Executive Vikram Pandit was awarded $3.6 million in stock, his first stock award since the financial crisis nearly toppled the company.
Big banks are under pressure to scale back their benefits costs following a slowdown in deal making during the se cond half of 2011, as companies turned cautious in the face of renewed e conomic uncertainty in Europe.
Some firms also are doling out more of their bonuses in stock. Bank of America Corp. Chief Financial Officer Bruce Thompson said last week that the Charlotte, N.C., bank intends to issue $1 billion in stock as part of year-end compensation in lieu of some cash awards.
This past week, traders and investment bankers at several firms learned their total year-end pay would be significantly less than the year before. At Goldman Sachs Group Inc., some bankers and traders were told they are taking home no bonus, while some partners' annual pay was cut by about half, said people familiar with the matter. Certain employees in Goldman's fixed-in come trading unit saw pay reduced by as much as 60%, these people said.
J.P. Morgan cut compensation in its investment bank by 9% from a year earlier. But total compensation across the nation's largest bank by assets rose 3%, at a time when the bank's profit increased 9% from a year earlier to a re cord $19 billion.
It suffered during the se cond-half slowdown on Wall Street but was able to offset that with profits from its Main Street retail and credit-card businesses. Some of the profitable areas of the bank, like credit cards, will see year-end payouts rise, said a person familiar with the situation.
J.P. Morgan Outperformed
J.P. Morgan outperformed many of its rivals in 2011, avoiding the quarterly losses that plagued Goldman Sachs and Morgan Stanley. But even J.P. Morgan struggled to replace in come being squeezed by new regulations and a slowing U.S. e conomy.
Revenue for the year dropped 5%, and the company's stock slid 20% for the year.
In the se cond half of 2011, quarterly profit fell year over year for two consecutive quarters, the first time that has happened since the height of the financial crisis.
Morgan Stanley, which relies more than others on investment banking for the bulk of its business, increased overall 2011 pay to $16.4 billion from $15.9 billion in 2010.
In both years the compensation was 51% of revenue.
Morgan Stanley's compensation figure rose in large part because of pay awarded from 2008 to 2010 that had been deferred until last year.
The firm this month reduced trader and banker bonuses, in many cases by 20% to 30% and deferred large parts of those awards until late 2012 and 2013.
This story first appeared on WSJ. com.
Write to Dan Fitzpatrick at dan.fitzpatrick@wsj. com, Aaron Lucchetti at aaron.lucchetti@wsj. com and David Benoit at david.benoit@dowjones. com.