By Tatiana Bautzer and Manya Saini
(Reuters) -Morgan Stanley gave its incoming CEO Ted Pick and the two other executives considered for the top job one-time bonuses of $20 million each, the bank said in a filing on Friday.
The performance-linked stock awards for Pick, Co-President Andy Saperstein and incoming Co-President Dan Simkowitz were based on fair value calculations of the bank's current stock price. The bonuses vest in 2027.
Earlier this week, Pick won the race to succeed long-time CEO James Gorman on Jan. 1. He promised to stick to the blue-chip Wall Street firm's strategy as it navigates a deal-making slump and uncertain economic outlook.
Pick, 54, leads Morgan Stanley's institutional securities unit, which houses its powerhouse investment banking and trading operations. The three-decade Morgan Stanley veteran started his career at the bank and came up the ranks to run trading, equity capital markets and fixed income.
Saperstein, 56, will oversee wealth and investment management on Jan. 1. Simkowitz, 57, will assume institutional securities from Pick after previously leading investment management.
It is unusual for Wall Street CEO candidates to stay on if they are not selected, and the bonuses offered at Morgan Stanley break from that tradition.
Pick described Saperstein and Simkowitz as "terrific friends," in an interview with Reuters, while outgoing CEO Gorman praised the three executives.
"CEO changes don't occur in a vacuum, and there is the chance for other management changes and/or turnover," Wells Fargo Mike Mayo wrote in a note this week.
Gorman will become executive chairman and may stay up to a year to help with Pick's transition.
Gorman was named CEO in January 2010 at the same time as his counterpart Brian Moynihan at Bank of America. Both executives, along with JPMorgan Chase Jamie Dimon, have led their respective firms through the wreckage of the financial crisis. Since becoming CEO in 2010, Gorman has transformed Morgan Stanley, creating a wealth management behemoth and making transformative acquisitions of broker E*Trade and asset manager Eaton Vance.
(Reporting by Tatiana Bautzer and Lananh Nguyen in New York and Manya Saini in Bengaluru; Editing by Anil D'Silva and Richard Chang)