Westly: Excessive Executive Compensation Bad for Business

Business Wire, July 20, 2005

SACRAMENTO, Calif. -- State Controller Steve Westly today denounced the outrageous compensation packages given to outgoing Morgan Stanley CEO Philip Purcell and co-president Stephen Crawford. Controller Westly is requesting that Morgan Stanley be placed on the CalPERS Executive Compensation Focus List, which shines a spotlight on companies with the worst pay for performance policies.

"We cannot support major league pay for minor league performance," Controller Westly said. "These actions are especially troubling given the company's poor financial performance."

The Morgan Stanley Board of Directors recently approved a $113.7 million severance package for Purcell, complete with medical benefits, access to an office, administrative and secretarial staff for life, and $250,000 per year in lieu of other benefits.

Morgan Stanley announced recently the resignation of co-president Crawford. After only three months as co-president, Crawford will walk away with a $32 million severance package -- the same compensation he would have received had he remained co-president for two years.

"There is a growing national concern about excessive executive compensation, which too many corporations are choosing to ignore. This is why CalPERS must act now," said Westly. "CalPERS should meet immediately with new Chairman and CEO John Mack to demand an explanation for the Board's actions and hear his plan to fix the problem."

To view Controller Westly's letters to CalPERS and CalSTRS, please go to www.sco.ca.gov.