Morgan Stanley CEO Rejects Bonus

Just in time for the season of giving, one of the world's most powerful CEOs says he will forfeit his bonus for the third year in a row.

Outgoing Morgan Stanley CEO John Mack isn't being forced to forgo his usual multi-million dollar year-end bonus. To the contrary: he asked the bank's board to withhold it voluntarily.

Mack is the only CEO of a major bank to voluntarily forgo a bonus for three years in a row.

According to ABC News, Mack said in a memo to employees that in light of the economy, he didn't feel it was appropriate for him to receive a bonus. Morgan Stanley got $10 billion in TARP funds from the government, all of which was repaid in June.

"Given this unprecedented environment and the extraordinary financial support governments provided to our industry, as the leader of this firm I recommended to the Compensation Committee of the Board last week that I receive no year-end bonus," Mack wrote in an internal memo, according to ABC News.

Bonuses have been the subject of much controversy, especially in light of the massive bailouts required by the country's major banks and other financial institutions in the past 18 months.

CEOs at Citigroup, Bank of America, JPMorgan and Goldman Sachs all rejected their bonuses in 2008, and this year, Goldman's top 30 managers are forfeiting their bonuses and receiving company stock instead.

Many of the banks that received TARP funds rushed to repay the loans before yearend in order to avoid tariffs imposed on bonuses at banks that received the loans. A New York Times editorial published this weekend suggests President Obama should consider imposing a heavy tax on bonuses even at banks that have repaid these loans. The editorial cites a similar program in the UK where the government stands to gain $1 billion in revenue. Now that's money Main Street residents could use to get back on their feet!

Photo courtesy of Wikimedia Commons.