Morgan Stanley has disclosed a substantial increase in total compensation for its Chief Executive Officer, Edward "Ted" Pick, for the 2025 fiscal year. According to a regulatory filing made public on Wednesday, February 13, 2026, Pick's pay package has been set at $45 million, a significant rise from the $34 million he received for 2024. This decision places him firmly within an emerging elite group of Wall Street leaders whose annual compensation now exceeds the $40 million threshold.
The bank's compensation committee justified the award by citing the firm's "exceptional" financial performance under Pick's leadership. For the full year 2025, Morgan Stanley reported record net revenue of $70.6 billion, representing an approximate 14% year-over-year increase. Net income reached $16.9 billion, with earnings per share also hitting a record high of $10.21. Furthermore, the bank delivered a total shareholder return of 45%, inclusive of dividends and share price appreciation.
A critical feature of the compensation structure is its heavy emphasis on long-term performance alignment. Approximately 75% of the $45 million award is deferred over a three-year period. This deferred portion is contingent upon the achievement of specific performance targets and is delivered in the form of equity awards that only vest if those goals are met. The committee noted that these awards could be canceled if performance conditions are not satisfied, underscoring the pay-for-performance philosophy.
This move by Morgan Stanley reflects a broader trend among major U.S. financial institutions, where CEO pay is increasingly clustering in the $40 million range. Industry consultants have begun referring to this bracket as the "$40 million club." The trend appears driven by a combination of strong annual results and competitive benchmarking among corporate boards, which may feel pressure to offer comparable packages to retain top executive talent.
Pick's $45 million compensation now ranks among the highest on Wall Street. It surpasses the $43 million package awarded to JPMorgan Chase's Jamie Dimon and is slightly below the $47 million granted to Goldman Sachs CEO David Solomon. Concurrently, Citigroup increased CEO Jane Fraser's pay to $42 million, pointing to record revenues and regulatory progress. Pick's package also exceeds the $37 million paid to his predecessor, James Gorman, in 2023, his final year as CEO.
The specifics of the pay components, such as the breakdown between base salary and incentive-based awards, were not detailed in the initial filing. However, it is understood that the majority of the value is tied to stock and deferred compensation rather than immediate cash payout. The full proxy statement, which will contain these granular details, is scheduled for release ahead of the bank's annual shareholder meeting in April 2026.
While reflective of a strong year, such substantial executive payouts can attract scrutiny from investors, particularly if future financial returns falter. Shareholder advisory firms and institutional investors often closely evaluate the alignment between executive compensation and long-term value creation. The upcoming spring slate of annual meetings will provide a forum for investor feedback through say-on-pay votes, which can serve as a barometer of shareholder sentiment regarding these compensation decisions.
The expansion of the $40 million CEO pay club underscores the high-stakes environment of global finance and the premium placed on proven leadership. As banks navigate a potentially robust year for capital markets and deal-making activity, compensation committees are signaling their commitment to rewarding executives who deliver superior financial and strategic results. The coming weeks will see other major institutions file their own proxy materials, offering further insight into compensation trends across the financial sector.
