|
Morgan
Stanley
1585
Broadway
New York, New York 10036
February
23, 2007
Proxy
Statement
We
are sending you this proxy statement in connection with the solicitation
of proxies by our Board of Directors for the 2007 annual meeting of shareholders.
We are mailing this proxy statement and the accompanying form of proxy
to shareholders on or about February 24, 2007. In this proxy statement,
we refer to Morgan Stanley as the “Company,” “we”
or “us” and the Board of Directors as the “Board.”
When we refer to Morgan Stanley’s fiscal year, we mean the twelve-month
period ending November 30 of the stated year (for example, fiscal
2006 is December 1, 2005 through November 30, 2006).
Annual meeting information
Date
and location. We will hold the annual meeting
on Tuesday, April 10, 2007 at 9:00 a.m., local time, at our offices
at 2000 Westchester Avenue, Purchase, New York.
Admission. Only
record or beneficial owners of Morgan Stanley’s common stock or their
proxies may attend the annual meeting in person. When you arrive at the
annual meeting, you must present photo identification, such as a driver’s
license. Beneficial owners must also provide evidence of stock holdings,
such as a recent brokerage account or bank statement.
Electronic access. You may listen to the
meeting at www.morganstanley.com. Please go to our website prior to the
annual meeting to register.
Voting information
Record
date. The record date for the annual meeting
is February 9, 2007. You may vote all shares of Morgan Stanley’s
common stock that you owned as of the close of business on that date.
Each share of common stock entitles you to one vote on each matter voted
on at the annual meeting. On the record date, 1,064,566,982 shares of
common stock were outstanding. We need a majority of the shares of common
stock outstanding on the record date present, in person or by proxy, to
hold the annual meeting.
Confidential
voting. Our bylaws provide that your vote is
confidential and will not be disclosed to any officer, director or employee,
except in certain limited circumstances such as when you request or consent
to disclosure. Voting of the shares held in the Morgan Stanley 401(k)
Plan (401(k) Plan) and the Employee Stock Ownership Plan (ESOP)
also is confidential.
Submitting
voting instructions for shares held through a broker. If
you hold shares through a broker, follow the voting instructions you receive
from your broker. If you want to vote in person at the annual meeting,
you must obtain a legal proxy from your broker and present it at the annual
meeting. If you do not submit voting instructions to your broker, your
broker may still be permitted to vote your shares. New York Stock Exchange
(NYSE) member brokers may vote your shares as described below.
| • |
|
Discretionary
items. The election of directors
and the ratification of appointment of Morgan Stanley’s independent
auditor are “discretionary” items. NYSE member brokers
that do not receive instructions from beneficial owners may vote
on these proposals in the following manner: (1) Morgan Stanley’s
wholly-owned subsidiaries, Morgan Stanley & Co. Incorporated
(MS&Co.) and Morgan Stanley DW Inc. (MSDWI), may
|
| |
vote
your shares only in the same proportion as the votes cast by all
record holders on the proposal; and (2) all other NYSE member
brokers may vote your shares in their discretion.
|
| • |
|
Non-discretionary
items. The Company’s proposal
to approve the 2007 Equity Incentive Compensation Plan (the Plan)
and the shareholder proposals are “non-discretionary”
items. Accordingly, absent specific voting instructions from beneficial
owners on these proposals, NYSE member brokers, including MS&Co.
and MSDWI, may not vote on these proposals.
|
If
you do not submit voting instructions and your broker does not have discretion
to vote your shares on a matter, your shares will not be counted in determining
the outcome of the vote on that matter.
Submitting
voting instructions for shares held in your name. If
you hold shares as a record holder, you may vote by submitting a proxy
for your shares by mail, telephone or internet as described on the proxy
card. If you submit your proxy via the internet, you may incur costs such
as cable, telephone and internet access charges. Submitting your proxy
will not limit your right to vote in person at the annual meeting. A properly
completed and submitted proxy will be voted in accordance with your instructions,
unless you subsequently revoke your instructions. If you submit a signed
proxy card without indicating your vote, the person voting the proxy will
vote your shares according to the Board’s recommendations.
Submitting voting instructions for shares held
in employee plans. If you hold shares in, or
have been awarded stock units under, certain employee plans, you will
receive directions on how to submit your voting instructions. Shares held
in the following employee plans also are subject to the following rules.
| • |
|
401(k)
Plan, Employee Stock Purchase Plan (ESPP) and ESOP. Mellon
Bank, N. A. (Mellon), the 401(k) Plan, ESPP and ESOP trustee or
custodian, as applicable, must receive your voting instructions
for the common stock held on your behalf in these plans on or before
April 4, 2007. If Mellon does not receive your voting instructions
by that date, it will vote your shares (in the case of the ESOP,
together with forfeited shares in the ESOP) in each applicable plan,
in the same proportion as the voting instructions that it receives
from other plan participants in the applicable plan. On February 9,
2007, there were 124,824 shares in the 401(k) Plan, 5,382,029 shares
in the ESPP and 50,261,889 shares in the ESOP.
|
| • |
|
Other
equity-based plans. State Street
Bank and Trust Company acts as trustee for a trust (Trust) that
holds shares of common stock underlying stock units awarded to employees
under several of Morgan Stanley’s equity-based plans. Employees
allocated shares held in the Trust must submit their voting instructions
for receipt by the trustee on or before April 4, 2007. If the
trustee does not receive your instructions by that date, it will
vote your shares, together with shares held in the Trust that are
unallocated or held on behalf of former Morgan Stanley employees
and employees in certain jurisdictions outside the United States,
in the same proportion as the voting instructions that it receives
for shares held in the Trust in connection with such plans. On February 9,
2007, 98,084,123 shares were held in the Trust in connection with
such plans.
|
Revoking
your proxy. You can revoke your proxy at any
time before your shares are voted by (1) delivering a written revocation
notice prior to the annual meeting to Thomas R. Nides, Secretary, Morgan
Stanley, 1585 Broadway, New York, New York 10036; (2) submitting
a later proxy that we receive no later than the conclusion of voting at
the annual meeting; or (3) voting in person at the annual meeting.
Attending the annual meeting does not revoke your proxy unless you vote
in person at the meeting.
Votes
required to elect directors. Each director
will be elected by a majority of the votes cast with respect to such director.
A “majority of the votes cast” means that the number of votes
cast “for” a director exceeds the number of votes cast “against”
that director. Under Delaware law, if the director is not elected at the
annual meeting, the director will continue to serve on the Board as a
“holdover director.” As required by the Company’s bylaws,
each director has submitted an irrevocable letter of resignation as director
that becomes effective if he or she is not elected by shareholders and
the Board accepts the resignation. If a director is not elected, the Nominating
and Governance Committee will consider the director’s resignation
and recommend to the Board whether to accept or reject the resignation.
The Board will decide whether to accept or reject the resignation and
publicly
disclose its decision and, if it rejects the resignation, the rationale
behind the decision within 90 days after the election results are certified.
Votes
required to adopt other proposals. The ratification
of Deloitte & Touche’s appointment, the approval of the
Plan and the approval of the shareholder proposals each requires the affirmative
vote of a majority of the shares of common stock represented at the annual
meeting and entitled to vote thereon.
“Abstaining.”
You may vote “abstain” for any nominee in the election of directors
and on the other proposals. Shares voting “abstain” on any nominee
for director will be excluded entirely from the vote and will have no
effect on the election of directors. Shares voting “abstain”
on the other proposals will be counted as present at the annual meeting
for purposes of that proposal and your abstention will have the effect
of a vote against the proposal.
 Item
1—Election of directors
Our
Board currently has twelve (12) directors. The entire Board stands
for election at each annual meeting of shareholders. Each director holds
office until his or her successor has been duly elected and qualified
or the director’s earlier resignation, death or removal. The nominees
are all current directors of Morgan Stanley, and each nominee has indicated
that he or she will serve if elected. We do not anticipate that any nominee
will be unable or unwilling to stand for election, but if that happens,
your proxy will be voted for another person nominated by the Board.
|
|
|
 |
|
Roy
J. Bostock (66). Chairman of The Partnership for a Drug-Free
America (since 2002). Chairman of the Committee for Economic Development
(2002 to 2005). Chairman of B|Com3 Group, Inc., an advertising and
marketing services firm that is now part of the Publicis Groupe
S.A. (2000 to 2001). Chairman and Chief Executive Officer, D’Arcy,
Masius Benton & Bowles (1990 to 2000).
Director
since: 2005
Other
directorships: Northwest Airlines Corporation
and Yahoo! Inc.
|
|
|
 |
|
Erskine
B. Bowles (61). President of the University of North Carolina
(since January 2006). Senior advisor (since 2001) and Managing Director
(1999 to 2001) of Carousel Capital LLC, a merchant bank. General
Partner at the private investment firm of Forstmann Little &
Company (1999 to 2001).
Director since: 2005
Other directorships: General Motors Corporation
and Cousins Properties Incorporated
|
|
|
 |
|
Howard
J. Davies (56). The Director, London School of Economics
and Political Science (since September 2003). Chairman of the UK
Financial Services Authority (August 1997 to September 2003). Deputy
Governor, the Bank of England (September 1995 to August 1997).
Director
since: 2004
|
|
|
|
 |
|
C.
Robert Kidder (62). Chairman & CEO, 3Stone Advisors LLC,
a private investment firm (since August 2006). Principal, Stonehenge
Partners, Inc., a private investment firm (April 2004 to July 2006).
President (November 2001 to March 2003) of Borden Capital, Inc.,
a company that provided financial and strategic advice to the Borden
family of companies. Chairman of the Board (January 1995 to August
2004) and Chief Executive Officer (January 1995 to March 2002) of
Borden Chemical, Inc. (formerly Borden, Inc.), a forest products
and industrial chemicals company.
Director
since: 1993
Other
directorships: Schering-Plough Corporation
|
|
|
 |
|
John
J. Mack (62). Chairman of the Board and Chief Executive
Officer (since June 2005). Chairman of Pequot Capital Management
(June 2005). Co-Chief Executive Officer of Credit Suisse Group (January
2003 to June 2004). President, Chief Executive Officer and Director
of Credit Suisse First Boston (July 2001 to June 2004). President,
Chief Operating Officer and Director of Morgan Stanley (May 1997
to March 2001).
Director
since: 2005
|
|
|
 |
|
Donald
T. Nicolaisen (62). Chief Accountant, Securities and Exchange
Commission (September 2003 to November 2005). Partner (1978 to September
2003) of PricewaterhouseCoopers, an accounting firm.
Director
since: 2006
Other
directorships: MGIC Investment Corporation,
Verizon Communications Inc. and Zurich Financial Services
|
|
|
 |
|
Charles
H. Noski (54). Corporate Vice President and Chief Financial
Officer (December 2003 to March 2005) and Director (November 2002
to May 2005) of Northrop Grumman Corporation. Senior advisor to
The Blackstone Group (March 2003 to November 2003). Vice Chairman
of the Board (July 2002 to November 2002), Vice Chairman of the
Board and Chief Financial Officer (February 2002 to July 2002) and
Senior Executive Vice President and Chief Financial Officer (December
1999 to February 2002) of AT&T Corp. President, Chief Operating
Officer and Director, Hughes Electronics Corporation (October 1997
to December 1999).
Director
since: 2005
Other
directorships: Microsoft Corporation
and Air Products and Chemicals, Inc.
|
|
|
 |
|
Hutham
S. Olayan (53). President, Chief Executive Officer and
Director of Olayan America Corporation, the Americas-based arm of
The Olayan Group (since 1985). Director of The Olayan Group, a private,
multinational enterprise with diversified businesses and investments
in the Middle East and globally (since 1981).
Director since: 2006
|
|
|
|
 |
|
Charles
E. Phillips, Jr. (47). President and Director (since January
2004) and Executive Vice President, Strategy, Partnerships, and
Business Development (May 2003 to January 2004) of Oracle Corporation,
a software company. Managing Director, Morgan Stanley (December
1996 to May 2003).
Director
since: 2006
Other
directorships: Oracle Corporation and
Viacom, Inc.
|
|
|
 |
|
O.
Griffith Sexton (63). Advisory director of Morgan Stanley (since
1995). Adjunct professor of finance at Columbia Business School
(since 1995) and visiting lecturer at Princeton University (since
2000).
Director
since: 2005
Other
directorships: Investor AB
|
|
|
 |
|
Laura
D. Tyson (59). Professor, Walter A. Haas School of Business,
University of California at Berkeley (since January 2007). Dean
of the London Business School (January 2002 to December 2006). Dean
(July 1998 to December 2001) and Class of 1939 Professor in Economics
and Business Administration (January 1997 to July 1998) at the Walter
A. Haas School of Business, University of California, Berkeley.
National Economic Advisor to the President and Chair, President’s
National Economic Council (February 1995 to December 1996).
Director since: 1997
Other
directorships: Eastman Kodak Company
and AT&T Inc.
|
|
|
 |
|
Klaus
Zumwinkel (63). Chairman of the Board of Management,
Deutsche Post AG, a global corporation comprised of four business
divisions, including mail, express (including DHL Worldwide), logistics
and financial services (since 1990).
Director
since: 2004
Other
directorships: Deutsche Lufthansa AG
(Supervisory Board), Deutsche Telekom AG (Chairman, Supervisory
Board), Karstadt Quelle AG (Supervisory Board) and Deutsche Postbank
AG (Chairman, Supervisory Board)
|
Our
Board recommends a vote “FOR” the election of all twelve (12) nominees.
Proxies solicited by our Board will be voted “FOR” these nominees
unless otherwise instructed.
New director. The
Nominating and Governance Committee recommends director candidates to
the full Board after receiving input from all directors. The Committee
members, other Board members, and senior management discussed potential
candidates during this search process.
The Board elected Mr. Phillips to the Board effective June 22,
2006. Mr. Mack and Ms. Tyson recommended Mr. Phillips as
a director candidate to the Nominating and Governance Committee. The Committee
members met or spoke with Mr. Phillips to assess him as a director
candidate. The Committee unanimously recommended to the full Board that
Mr. Phillips be elected as a director. The Board followed the Committee’s
recommendation.
Board meetings and committees. Our
Board met 13 times during fiscal 2006. Each director attended at least
75% of the total number of meetings of the Board and committees on which
the director served that were held while the director was a member. The
Board’s standing committees include the following:
|
|
|
|
|
|
|
| Committee |
|
Current
Members |
|
Primary
Responsibilities |
|
# of Meetings |
|
Audit(1)
|
|
Charles H. Noski (Chair)
Howard J. Davies
Donald T. Nicolaisen
Charles
E. Phillips, Jr.
|
|
• Oversees
the integrity of our Company’s consolidated financial statements,
system of internal controls, risk management and compliance with
legal and regulatory requirements.
• Selects, determines the
compensation of, evaluates and, when appropriate, replaces the independent
auditor, and pre-approves audit and permitted non-audit services.
• Oversees
the qualifications and independence of the independent auditor and
performance of our Company’s internal auditor and independent
auditor.
• After
review, recommends to the Board the acceptance and inclusion of
the annual audited consolidated financial statements in the Company’s
Annual Report on Form 10-K.
|
|
9
|
|
Compensation,
Management
Development
and
Succession(2)
|
|
C. Robert Kidder (Chair)
Erskine
B. Bowles
Donald T. Nicolaisen
|
|
• Annually
reviews and approves the corporate goals and objectives relevant
to the compensation of the Chairman and CEO and evaluates his performance
in light of these goals and objectives.
• Determines the compensation
of our executive officers and other appropriate officers.
• Administers our equity-based
compensation plans.
• Oversees plans for management development and
succession.
|
|
9
|
|
Nominating
and
Governance(3)
|
|
Laura D.
Tyson (Chair)
Roy J. Bostock
Hutham
S. Olayan
Klaus Zumwinkel
|
|
• Identifies
and recommends candidates for election to the Board.
• Establishes
procedures for its oversight of the evaluation of our Board.
• Recommends
director compensation and benefits.
• Reviews
annually our corporate governance policies.
|
|
6
|
(1)
The following changes occurred in the membership of the Audit Committee
during fiscal 2006. On March 10, 2006, Mr. Noski became Committee
Chair, Mr. Kidder concluded service as Committee Chair and Dr. Zumwinkel
concluded Committee service. On April 4, 2006, Mr. Kidder concluded
Committee service and Mr. Nicolaisen joined the Committee. Mr. Phillips
joined the Committee on September 19, 2006.
(2)
The following changes occurred in the membership of the Compensation,
Management Development and Succession Committee during fiscal 2006. Mr. Kidder
became Committee Chair on March 10, 2006. Mr. Bowles joined
the Committee on January 1, 2006. Mr. Davies concluded Committee
service on April 4, 2006. Mr. Nicolaisen joined the Committee
on June 19, 2006.
(3)
The following changes occurred in the membership of the Nominating and
Governance Committee during fiscal 2006. Dr. Zumwinkel joined the
Committee on March 10, 2006. Ms. Olayan joined the Committee
on April 4, 2006.
Our
Board has adopted a written charter for each of the Audit Committee, Compensation,
Management Development and Succession Committee and Nominating and Governance
Committee setting forth the roles and
responsibilities
of each committee. The charters are available at our corporate governance
website at www.morganstanley.com/about/company/governance/index.html.
Lead Director. Mr.
Kidder is currently the Lead Director appointed by the independent directors
of the Board. The Lead Director’s duties and authority, set forth
in our Corporate Governance Policies, include the authority to call meetings
of non-employee directors and independent directors, to facilitate communication
between the Chairman and the independent directors, and to be available,
if requested by major shareholders, for consultation and direct communication.
Director independence. The
Board has determined that Messrs. Bostock, Bowles, Davies, Kidder, Nicolaisen,
Noski, Ms. Olayan, Mr. Phillips, Dr. Tyson and Dr. Zumwinkel
are independent in accordance with the Director Independence Standards
established under our Corporate Governance Policies (attached as Annex
A). Ten (10) of twelve (12) of our current directors are independent.
All members of the Audit Committee, the Compensation, Management Development
and Succession Committee and the Nominating and Governance Committee satisfy
the standards of independence applicable to members of such committees.
In addition, the Board has determined that Messrs. Nicolaisen, Noski and
Phillips are “audit committee financial experts” within the
meaning of current SEC rules.
In
determining Mr. Bostock’s independence, the Board considered,
in addition to relationships deemed immaterial under the Company’s
categorical standards of director independence, two employment relationships
of the Company with family members of Mr. Bostock. In connection
with the Company’s acquisition of FrontPoint Partners LLC (FrontPoint)
in December 2006, a son-in-law of Mr. Bostock who was employed at
FrontPoint and held less than 5% of the equity interests in FrontPoint
became a managing director of the Company in the Company’s asset
management business. The Board considered that the managing director:
received his pro rata share of the merger consideration (including contingent
consideration that will become payable in 2008 if certain conditions are
satisfied); received a retention payment to induce him to become and remain
a Morgan Stanley employee; is not an executive officer of the Company
within the meaning of relevant SEC and NYSE rules; and will be awarded
compensation in line with his position at Morgan Stanley and in comparison
to market standards. Another son-in-law of Mr. Bostock was a summer
associate in the Company’s investment banking division during the
summer of 2006. The Board considered that this son-in-law was awarded
compensation in line with his position at Morgan Stanley and with respect
to market standards. The Board also considered that Mr. Bostock has
no influence over the asset management business and the investment banking
division other than that possessed by any other Morgan Stanley non-employee
director. The Board determined, consistent with NYSE rules and based upon
the facts and circumstances, that both relationships are immaterial to
Mr. Bostock’s independence.
Non-employee director meetings. The
Company’s Corporate Governance Policies provide that non-employee
directors meet in executive sessions and that the Lead Director will preside
over these executive sessions. If any non-employee directors are not independent,
then the independent directors will meet in executive session and the
Lead Director will preside over these executive sessions.
Director compensation. The
Company pays non-employee directors promptly after the annual meeting
of shareholders for the annual period beginning at the annual meeting
of shareholders and concluding at the subsequent annual meeting of shareholders.
Employee directors receive no compensation for Board service. Effective
July 6, 2006, the Board, based upon the recommendation of the Nominating
and Governance Committee, revised non-employee director equity awards
and retainers.
| • |
|
Retainers. Retainers
are prorated when a director joins the Board at a time other than
at the annual meeting of shareholders. Prior to July 6, 2006,
non-employee directors received the following annual retainers for
their Board service.
|
|
|
|
|
| |
|
Retainer
|
|
Board
member ........................................................................................................................
|
|
$ |
75,000 |
|
Committee
chair .....................................................................................................................
|
|
$ |
15,000 |
|
Committee
member ................................................................................................................
|
|
$ |
7,500 |
Effective
July 6, 2006, non-employee directors receive the following annual
retainers for their Board service.
|
|
|
|
| |
|
Retainer
|
|
Board member
.........................................................................................................................................
|
|
$ |
75,000 |
|
Audit Committee chair
...........................................................................................................................
|
|
$ |
30,000 |
|
Audit Committee member
......................................................................................................................
|
|
$ |
15,000 |
|
Compensation,
Management Development and Succession Committee and Nominating and
Governance Committee chairs .........................................................................................................
|
|
$ |
20,000 |
|
Compensation,
Management Development and Succession Committee and Nominating and
Governance Committee members ....................................................................................................
|
|
$ |
10,000 |
|
Lead Director
...........................................................................................................................................
|
|
$ |
30,000 |
| • |
|
Directors’
Equity Capital Accumulation Plan (DECAP). Prior
to July 6, 2006, non-employee directors received 4,000 shares
of common stock when elected a director and annually thereafter
while a director. Effective July 6, 2006: (1) the dollar
value of the equity award that a director receives in connection
with his or her initial election as a director and annually thereafter
while a director is $250,000 per award; (2) directors must
hold 50% of each such equity award in the form of stock units, payable
in common stock after the director’s retirement from the Board;
and (3) the remaining 50% of each such equity award will be
made in shares of common stock, payable immediately. These changes
are designed to align further the interests of non-employee directors
and shareholders.
|
DECAP
also provides that the non-employee directors may elect to (i) receive
all or a portion of their retainers, on a current or deferred basis, in
cash or shares of common stock and (ii) defer receipt of common stock
grants. Directors receive interest credits on amounts held in deferred
cash accounts and dividend equivalents on stock units.
| • |
|
Other
benefits. Morgan Stanley offers to
match certain charitable gifts by non-employee directors up to $2,000
per year. During fiscal 2006, the Company did not match any charitable
gift for any non-employee director.
|
| • |
|
Advisory
director. Mr. Sexton has been
an advisory director since 1995 and was a full-time Company employee
prior to becoming an advisory director. Until his election to the
Board in September 2005, the Company provided Mr. Sexton with
cash payments, Company-subsidized medical and dental insurance,
administrative support and office space. Since his election in September
2005, Mr. Sexton has not received cash payments and he pays
for his medical and dental insurance provided through the Company.
|
| • |
|
Consulting
Agreements. The Corporate Governance
Policies provide that the Company should not enter into paid consulting
agreements with non-employee directors.
|
| • |
|
Non-employee
director compensation table. The
following table contains information with respect to the compensation
(including deferred compensation) of the non-employee directors
during fiscal 2006 with respect to their Board service.
|
|
|
|
|
|
|
|
| Name |
|
Fees Earned or Paid in Cash
($)(1)
|
|
Stock Awards
($)(2)
|
|
Total
($)
|
|
Roy
J. Bostock ...............................................................
|
|
84,375 |
|
257,080(3) |
|
341,455 |
|
Erskine
B. Bowles ..........................................................
|
|
111,250(4) |
|
484,040(5) |
|
595,290 |
|
Howard
J. Davies ...........................................................
|
|
88,125 |
|
257,080(3) |
|
345,205 |
|
C.
Robert Kidder ............................................................
|
|
120,000 |
|
257,080(3) |
|
377,080 |
|
Donald
T. Nicolaisen ....................................................
|
|
95,625 |
|
257,080(3) |
|
352,705 |
|
Charles
H. Noski ............................................................
|
|
101,250 |
|
257,080(3) |
|
358,330 |
|
Hutham
S. Olayan .........................................................
|
|
84,375 |
|
257,080(3) |
|
341,455 |
|
Charles
E. Phillips, Jr. ....................................................
|
|
63,750(6) |
|
252,840(7) |
|
316,590 |
|
O.
Griffith Sexton ...........................................................
|
|
75,000 |
|
257,080(3) |
|
332,080 |
|
Laura
D. Tyson ..............................................................
|
|
93,750 |
|
257,080(3) |
|
350,830 |
|
Klaus
Zumwinkel ...........................................................
|
|
84,375 |
|
257,080(3) |
|
341,455 |
(1)
Includes amounts the director elected under DECAP to allocate to the deferred
cash account or to receive in the form of stock units. Reflects annual
retainers for Board, committee and Lead Director service paid on or after
the date of the 2006 annual meeting of shareholders and prorated amounts
reflecting the changes in retainer fees approved effective July 6,
2006 and discussed on page 8.
(2) Includes amounts the director elected under DECAP to
receive in the form of stock units.
(3) Value of 4,000 shares of common stock granted on April 4,
2006 with respect to the director’s election at the 2006 annual shareholders
meeting. The value is calculated using $64.27, the closing price of the
common stock on the grant date.
(4)
Mr. Bowles was elected to the Board as of December 2, 2005 and
appointed to the Compensation, Management Development and Succession Committee
as of January 1, 2006. His compensation reflects prorated amounts
for the portion of the 2005-2006 annual service period during which he
served as a director and member of the Committee.
(5)
Value of 4,000 shares of common stock granted on January 1, 2006
with respect to Mr. Bowles’ election to the Board in December
2005 and 4,000 shares of common stock granted on April 4, 2006 with
respect to Mr. Bowles’ election at the 2006 annual shareholders
meeting. The values are calculated using $56.74, the closing price of
the common stock on December 30, 2005, and $64.27, the closing price
of the common stock on April 4, 2006.
(6) Mr. Phillips was elected to the Board as of June 22,
2006 and appointed to the Audit Committee as of September 19, 2006.
His compensation reflects prorated amounts for the period from his election
to the Board and appointment to the Committee until the 2007 annual meeting
of shareholders.
(7) Value of 4,000 shares of common stock granted on July 1,
2006 with respect to Mr. Phillips’ election to the Board. The
value is calculated using $63.21, the closing price of common stock on
June 30, 2006.
Director attendance at annual meetings. The
Company’s Corporate Governance Policies state that directors are
expected to attend annual meetings of shareholders. All nine (9) incumbent
directors, and the two additional nominees standing for election, attended
the 2006 annual meeting of shareholders.
Corporate governance
Morgan
Stanley has a corporate governance webpage at the “Company Information”
link under the “About Morgan Stanley” link at www.morganstanley.com
(www.morganstanley.com/about/company/governance/index.html).
The
Board has taken the following steps designed to enhance the Company’s
corporate governance since the last annual meeting of shareholders:
| |
• |
|
Majority
voting in director elections. The
Board adopted a majority vote standard for uncontested director
elections. The standard is discussed under Votes required to elect
directors on page 2.
|
| |
• |
|
Director
compensation. The Board approved
changes to non-employee director equity awards and retainers, as
discussed under Director compensation on page 8. Directors must
hold 50% of the equity awards they receive in the form of stock
units, payable in common stock, until they retire from the Board.
|
| |
• |
|
Compensation
consultant. In fiscal 2007, the Compensation,
Management Development and Succession Committee decided to retain
a new independent compensation consultant that does not currently
provide any compensation consulting services to the Company. Going
forward, any engagement by the Company of the Committee’s consultant
must be approved by the Committee and the Committee must pre-approve
any engagement of the consultant by the Company | |
