John Mack’s early exit…

September 11, 2009

Back in May, we thought it seemed kind of odd that Morgan Stanley (MS) Chairman and CEO John Mack’s contract had been updated, but that the length of the contract had not changed. Yesterday, with the news that Mack was stepping down as CEO, it suddenly became clear why.

A careful reading of that revised contract appears to indicate that Mack will continue to get paid as CEO through the end of June, even though he’ll be stepping down at the end of the year. Then again, Morgan Stanley could simply enter into a different contract with Mack to serve as Chairman. In any event, we’ll be on the lookout for that contract, as well as a contract for James Gorman, who, at least based on our search, doesn’t appear to have an employment contract.

This also serves as a good reminder that sometimes you can catch something odd in an SEC filing and know it doesn’t quite make sense, even if you’re not sure why. That’s exactly what happened here. The contract definitely struck me as odd at the time, but I didn’t know why.

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