Let me see if I understand what the Morgan Stanley Board did with Stephen Crawford. They gave him a contract paying him a minimum compensation package of $32 million for the following two years. Alternatively, he could take the full $32 million immediately and walk away. Hands up anyone that is surprised that Crawford took the money now and left?
If this man is worth that sort of a package, and they must have thought so, he must be a very good negotiator with solid business experience, if so, why would they not think he would take the logical step?
The choice was $32 million now and go and find another job (probably with a compensation package paying a high minimum and bonus), most likely totaling millions, or $32 million over the next two years, in addition to any upside which they may want to give him.
It reminds me of my time in that business. They hired able professionals with experience and strong negotiation skills and then they were surprised, and sometimes upset, when this experience and these skills were used in negotiating his or her own package. They always seemed to be expecting that loyalty would trump good sense in agreeing a package. Sounds like the Morgan Stanley Board were hoping that loyalty would trump good sense in this case as well. Yet the business in general works against loyalty as performance is all and the lack of it quickly leads to the door!
The logical move for Crawford is to take the money and move on to another job. And should the other investment banks not want to endure the possible bad publicity of hiring him, Crawford can always go to those less sensitive to bad press and always looking for quality professionals, a private equity firm or a hedge fund, the latter most in need of quality professionals, given that almost anyone of any experience and ability has set up a hedge fund of late.
OAM
See article:
Stephen Crawford has resigned as co-president of Morgan Stanley, pocketing the $32m awarded to him under a controversial new contract revealed by the Wall Street bank last week.
The agreement gave him a guaranteed $32m over two years and allowed him to walk away with the entire amount if he left within a month.
See full Article.
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