Morgan Stanley CEO stock play pays off

James Gorman Pic

When Morgan Stanley’s share price fell to $20 in 2011, the bank’s CEO, James Gorman, and several of his top lieutenants tried to encourage investors by buying up stock with their own money.

Now, that put-your-money-where-your-mouth-is approach appears to have paid off.

The New York Times reports that Gorman purchased 100,000 shares for about $2m in August 2011. With the stock price on Friday at $29.51, Gorman has netted nearly $1m on his investment on paper.

Ruth Porat, the bank’s chief financial officer, and Paul J. Taubman, then one of the co-heads of the bank’s securities arm, bought more than $1.5m worth of shares at the same time Gorman did. Today, those shares would be worth more than $2.2m, assuming they have not yet been sold.

Gorman, like other bank chief executives, receives stock as part of his annual compensation. His equity award nearly doubled, in fact, in 2013. But it is rare for the head of a bank to purchase shares in his or her own company.

To access the complete New York Times article hit the link below:

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