Morgan Stanley Equity Ownership Commitment

Morgan Stanley believes in aligning the long-term interests of employees with those of shareholders. To further that goal and to serve as an example to employees throughout the Firm, Morgan Stanley has adopted this Equity Ownership Commitment.

The Equity Ownership Commitment calls for the following:

Stock Ownership Requirement. Each designated Executive Officer* (“Covered Officer”) is required, within five years from the later of the effective date of this Equity Ownership Commitment or the date on which he or she becomes a Covered Officer, to retain ownership of a number of shares of Morgan Stanley common stock with a value as follows:

  • Chief Executive Officer (“CEO”) – 10x base salary
  • All other Covered Officers – 6x base salary

Each Covered Officer will be subject to this stock ownership requirement for so long as he or she remains a Covered Officer.

Stock Retention Requirement. In addition to the stock ownership requirement set forth above, Operating Committee members must hold an amount of Morgan Stanley common stock** or Morgan Stanley equity awards equal to a percentage of the after-tax value of all shares of common stock acquired pursuant to Morgan Stanley equity awards granted as compensation for service as an Operating Committee member (“Equity Award Shares”) as follows:

  • CEO – 75% of Equity Award Shares.
  • All other Operating Committee members – 50% of Equity Award Shares acquired pursuant to equity awards granted beginning in January 2016 and thereafter, and 75% of Equity Award Shares acquired pursuant to equity awards granted prior to January 2016; provided that Operating Committee members who are Covered Officers must retain 75% of all Equity Award Shares until the applicable stock ownership requirement is met.

The Equity Ownership Commitment applies to Morgan Stanley equity awards as follows:

Restricted Stock Units — Commitment applies to net shares granted after assumed tax withholding.

Performance Contingent Restricted Stock Units – Commitment applies to net shares earned after withholding taxes.

Stock Options — Commitment applies to share equivalent of net proceeds received upon exercise after exercise cost and withholding taxes.