Morgan Stanley Chairman John Mack, who has said Wall Street's high pay packages show that the industry is out of touch with mainstream America, is receiving a 150 percent base salary increase to $2 million.
Mack, who declined to accept a bonus the past three years, received a base salary of $800,000 in 2009. In 2006, the last year he received a bonus, he was awarded restricted shares that were worth $36.2 million at the time.
The salary increase, which was revealed in a regulatory filing, was meant to pay him in line with his new role as chairman, Morgan Stanley said.
James Gorman succeeded Mack as chief executive of the firm on January 1, but Mack has continued as chairman and continues to meet with clients and regulators.
Wall Street firms have faced a public backlash for their pay practices after they paid billions of dollars in bonuses a year after U.S. taxpayers bailed out the banking industry.
Mack, during a speaking appearance in February, said: I still don't think the industry gets it on pay.
If we don't do something, the government will do something on pay, said Mack.
Even though Mack did not receive a bonus for 2009, Gorman received a compensation package that could total about $15 million. Morgan Stanley reported a loss for 2009 as it missed out on trading opportunities during the rebound from the financial crisis.
Its chief rival Goldman Sachs , which reported a record profit in 2009, gave CEO Lloyd Blankfein a compensation package that was worth $9.5 million.
That Mack received a raise of $1.2 million underscores how Wall Street sees pay differently from Main Street, said Cornelius Hurley, director of the Morin Center for Banking and Financial Law at Boston University.
The proportions are just so out of scale with the value that these men and women add to the financial system that they can get away with things like this, Hurley said.
Mack's new salary goes into effect on June 1. Morgan Stanley said Mack has not received a pay increase since he rejoined the firm in 2005.
Also on Friday, a source said Morgan Stanley will slash about 200 brokerage support staff this week as part of a consolidation in Morgan Stanley Smith Barney. The firm was also planning to expand staff that works with ultra wealthy customers, the source said.
(Reporting by Steve Eder; Editing by Tim Dobbyn and Matthew Lewis)