In a Bloomberg news report, Glass Lewis had told Morgan Stanley shareholders through a note that the investment bank's executive pay plan should be rejected. The shareholder advisory firm said that the bank had not properly linked the compensation with the performance, as the executive pay was higher despite poor performance of the bank compared to its competitors.
The votes are highly influenced by firms such as Glass Lewis and Institutional Shareholder Services. Institutional investors such as Fidelity Investments and Vanguard tend to heed their call, as they trust the assessments of these firms on future decisions.
Morgan Stanley, in its first quarter report, said it had listed a 14% drop in adjusted earnings. This is attributed to the poor performance of its bond trading unit and this again highlights the future plans about how the bank would be able to keep its composure in this flagging economic times.
This adds pressure on current CEO James Gorman, who has been shoring up the wealth management arm of the bank as well as reduce assets in its portfolio. He is planning to make the bank's profits continuous even in lean times but many see his efforts as weakening the capital base of the long standing bank.
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