Third Point's Dan Loeb has launched his latest activist campaign, against compensation for top executives at Morgan Stanley.
The billionaire last week wrote to clients to say it thought the bank paid its board of directors too much, The Wall Street Journal reports. Third Point took a stake in Morgan Stanley last week.
With one exception—director Roy Bostock, who was not named in the letter; Loeb clashed with Bostock when Bostock served as chairman of Yahoo! Inc.—Loeb did not identify anyone in particular he thought was paid too much. But he did question why Morgan Stanley paid its directors more than other major banks, despite the fact that "Morgan Stanley is a substantially smaller and simpler bank."
Bostock is set to step down from the Morgan Stanley board this spring.
Loeb is now looking at others' compensation at Morgan Stanley, and has reportedly concluded that in some cases the high pay is appropriate as Morgan Stanley seeks to hold onto talent. In particular, he has determined that CFO Ruth Porat is fairly compensated.
Nor does Loeb seem interested in picking a fight with Morgan Stanley's top management.
"If we did not believe Morgan Stanley's management was up to these important tasks, we would not own such a significant position," he wrote. Loeb said that Morgan Stanley shares could "nearly double" if CEO James Gorman continues to build its brokerage business and comes up with a "bold fix" for its bond-trading business.
Gorman has "reached out to Mr. Loeb and welcomed his as a new investor and said he was pleased that Mr. Loeb shared his view on the future upside performance of Morgan Stanley and its stock," Morgan Stanley said.