(Reuters) -
Anti-Wall Street protesters upstaged Morgan Stanley's annual meeting on
Tuesday, lobbing tough questions at Chairman and Chief Executive James Gorman
and shouting negative comments over a bank official who was attempting to read
a tally of shareholder votes.
The
53-year-old CEO kept his cool through the meeting, but took protesters to task
after one accused him and the board of directors of "immoral" and
"unethical" practices. Among protesters' complaints were the bank's
high pay packages, job cuts and financial reform lobbying efforts.
"I take
umbrage at the suggestion that our board did anything unethical and I can't
just let that sit out there," said Gorman.
He went on
to say that although some of Morgan Stanley's business practices, including
mortgage servicing, had been poor in the past, "I don't regard those as
immoral or unethical."
After
engaging in debate with some members of the protester group, which identified
itself as "The 99% Spring" and was similar in tone to the
"Occupy Wall Street" movement, Gorman instructed Corporate Secretary
Martin Cohen to announce the preliminary shareholder vote tally.
But
protesters quickly drowned out Cohen by yelling negative comments about Morgan
Stanley and Wall Street.
"We
will not be quiet until we create a system that prevents the 1 percent from
ripping off the 99 percent," they chanted in a call-and-response fashion.
Once the
protesters had finished their chant, Cohen announced that 93.6 percent of
shareholders voted for the election of directors, 94.8 percent of investors
approved proposed compensation for top executives and 81.4 percent approved a
plan to add clawback provisions to bonuses stemming back to 2007.
There
followed a second, lengthier question-and-answer session between Gorman and
shareholders - who were mostly protesters - that pushed the meeting to over an
hour.
After the
meeting, which was staffed with security guards and police, Gorman shook hands
with a few more supportive shareholders and fielded more questions from
reporters.
Gorman said
that Morgan Stanley does not have positions similar to the derivatives trades
that have caused at least $2 billion in losses for competitor JPMorgan Chase
& Co. Morgan Stanley's corporate treasury desk, which manages the company's
excess liquidity, is "conservative," he said.
Gorman also
said he does not believe JPMorgan's trading losses, which caused negative
reactions from rating agencies for that bank, will affect Moody's Corp's
assessment of Morgan Stanley's rating.
"I
don't think JPMorgan has anything to do with how Morgan Stanley is rated,"
said Gorman.
Moody's is
in the process of assessing downgrades for several large banks, and has said it
might lower Morgan Stanley's three notches, from "A2" to
"Baa2," which is just two notches above junk. Moody's has an open
dialogue with Morgan Stanley as it gears up for the release of its assessment
in June, Gorman said.
Gorman, who
opened the annual meeting by saying he hoped it would be "respectful and
orderly," had been prepared for the protesters. All considered, he said,
"I thought it was pretty smooth."
A
shareholder who shook hands with Gorman said he was upset that the event was
dominated by protesters' political statements rather than more traditional
shareholder concerns. "I want the stock to go back to where it was -
that's all I want," he said.
Morgan
Stanley shares were up 0.3 percent at $14.35 in afternoon trading on Tuesday.
Its shares closed at $14.30 on Monday, less than half the company's stated book
value of $31.42 as of March 31.
(Reporting
by Lauren Tara LaCapra; Editing by Gerald E. McCormick and Tim Dobbyn)
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Morgan
Stanley Chief Executive Officer James Gorman received
a $10.5 million package
for 2011, down from $14 million for 2010,
after the bank’s shares dropped 44
percent last year.
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