NEW YORK – Former Morgan Stanley (search) Chairman and Chief Executive Phil Purcell (search) will receive $43.9 million in bonus money, $250,000 per year for life, health benefits and even office help as part of his severance with the company he led for eight years.
Purcell, 61, will receive half his bonus money on Jan. 15, 2006, and the rest exactly one year later. The bonus will be adjusted by a percentage roughly equal to Morgan Stanley's annual pretax earnings growth.
In addition, under the agreement filed with the Securities and Exchange Commission on Thursday, Purcell will receive the $250,000 per year payment for the rest of his life, and Morgan Stanley agreed to contribute another $250,000 per year in Purcell's name to charities of his choice.
The company will also provide "administrative support" — office facilities and assistance — for his lifetime.
All of the awards and perks are contingent on Purcell staying away from Wall Street (search). Should he take a similar job with a Morgan Stanley competitor, he has to give it all up.
Morgan Stanley declined to comment Thursday on Purcell's package.
Purcell's replacement, John Mack, is guaranteed to receive an annual salary and bonus package equal to the average compensation of Morgan Stanley's top four competitors, with a cap of $25 million per year.
Purcell resigned under pressure from the company June 13 after a wave of top-level employee departures led a group of former executives and shareholders to wage a public relations campaign calling for his job.
While credited for Dean Witter & Co.'s 1997 takeover of Morgan Stanley, which installed him at the top of the combined company, Purcell was also criticized for failing to fully integrate Dean Witter's brokerage arm with Morgan Stanley's storied investment banking business.
The rift between the two divisions was heightened in late March, when Purcell named Zoe Cruz and Stephen Crawford — both considered Purcell loyalists — as co-presidents of the company and, a few weeks later, gave them seats on the board of directors.
As a result, five of the 14 members of the company's executive committee, including veteran merger-and-acquisition star Joseph Perella (search), left Morgan Stanley, along with a number of other top traders and dealmakers. The pressure on the company's stock price from all the bad news ultimately led to Purcell's departure.
Crawford, who along with Cruz stepped down from the board of directors after Mack was hired, will receive his own payday, according to the SEC filing. Crawford will receive salary, bonuses and long-term incentive compensation of $16 million per year over the next two years, the company said.