Preliminary Proxy Statement

Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

No fee required.

Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

Title of each class of securities to which transaction applies:

Aggregate number of securities to which transaction applies:

Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

Proposed maximum aggregate value of transaction:

Total fee paid:

Fee paid previously with preliminary materials:

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

Amount previously paid:

Form, Schedule or Registration Statement No.:

Filing Party:

Date Filed:

James P. Gorman    

April 3, 2020

Dear fellow shareholders,

I cordially invite you to attend Morgan Stanley’s 2020 annual meeting of shareholders on Thursday, May 21, 2020. I hope that you will be able to attend, and, if not, I encourage you to vote by proxy. Your vote is very important.

As I write this, we are in the midst of a global public health crisis which is causing serious humanitarian issues, as well as economic ones. The recent spread of the Covid-19 virus has presented extraordinary challenges to governments, the global economy and markets around the world. The loss of life due to the virus is devastating, and public health authorities and medical workers are doing everything in their power to stem the tide of the virus. Many who have not been directly impacted by the virus have experienced severe indirect effects, with millions of people losing their jobs overnight. It is essential for governments to act as aggressively as they can and to focus, as they now are, on the surge in unemployment and the necessary significant stimulus measures in support of consumers, small businesses and corporations. The U.S. Federal Reserve and other global central banks and regulators have taken extraordinary and necessary steps to ensure liquidity in the markets.

At Morgan Stanley, we have taken measures to prioritize the health of our employees and their families, and to be prepared operationally to serve our clients and help them navigate uncertain markets. We have benefited in this period from robust business continuity planning and from years of investment in our technology infrastructure. Approximately 90% of our employees are currently working from home and continuing to serve our clients. While the current situation is gravely concerning, we have weathered serious events and extreme market volatility before, and the fundamentals of the financial system are much stronger today than in the past. I am pleased to say that we and many of our peers have the capital and the liquidity to be well-positioned to work with governments, central banks and regulators to be part of the extraordinary effort it will take to assist in getting the global economy and global markets back on track.

While in the current environment 2019 seems like a long time ago, it is important for us as shareholders to note that last year was a strong year for Morgan Stanley and our financial performance was one of the best in our history. Over the past decade we have reshaped our business and reset our strategy, while making significant investments in technology and talent. This has led to substantial earnings growth while increasing earnings stability. Over the next five years our goal continues to be to shift our business further, emphasizing durable sources of revenues* in each of our businesses that will support a base level of profitability in periods of market disruption.

Morgan Stanley reported record revenues, pre-tax profit* and net income* for 2019. We delivered four consecutive quarters of $10 billion plus revenues – a consistent, stable performance that resulted in record annual revenues of over $41 billion, with strong results across all our businesses. Return on average tangible common equity of 12.9%* was within our target range for the year.

In February, we announced our intent to acquire E*TRADE — a leading financial services company and pioneer in the online brokerage industry — by the end of this year. This acquisition represents an extraordinary growth opportunity for our Wealth Management business and will significantly increase its breadth and scale. In addition, this continues the decade-long transition of our Firm to a more balance sheet-light* business mix, emphasizing more durable sources of revenue*.

Our Board of Directors and management value the views of our shareholders. Over the past year, we have engaged in discussions with and sought feedback from shareholders on a broad range of topics, including our strategy, financial performance, executive compensation, corporate governance, diversity and environmental and social goals.

In 2019, Stephen Luczo was elected to your Board. He brings extensive technology expertise to the Firm and is an experienced investor in technology venture capital and private equity. His experience will help the Board in analyzing and capitalizing on the rapid developments in technology within financial services.

Morgan Stanley is very well positioned to successfully navigate whatever the next five years bring as we execute our strategic objectives. Moreover, our strong culture and brand remains our most powerful competitive advantage. I am excited about this future and have great confidence in our senior leadership team.

2020 marks the 85th anniversary of Morgan Stanley. This is a moment not only to reflect on our successes and celebrate the Firm we are today, but also to look at the future and the strong, diverse and stable Firm we are becoming. Our continued success is made possible by the disciplined execution of our strategy, but it is our culture that truly positions us for long-term sustainable success. As we head into the next phase of our journey, we will continue to invest meaningfully in our culture, and renew the commitment, energy and focus that we have on living our core values every day.

I hope you will read my Letter to Shareholders where I discuss our achievements and opportunities for the future in greater detail. I look forward to hearing from you at the Annual Meeting next month. In the meantime, please stay healthy.

Thank you for your support of Morgan Stanley.

Very truly yours,

James P. Gorman

Chairman and Chief Executive Officer

^*  See the “Explanatory Notes” of the Compensation Discussion and Analysis, which provide additional information regarding the metrics referenced and non-GAAP measures.

Item 1

Item 2

Item 3

Item 1

Key Statistics on Board Succession

4

New directors since the beginning of 2018

5.4 years

Average tenure of Board upon
election at the annual meeting

65

Average age of Board upon election at the annual meeting

Combine a broad spectrum of experience and expertise with a reputation for integrity;

Have experience in positions with a high degree of responsibility;

Are leaders in the companies or institutions with which they are affiliated;

Can make contributions to the Board and management;

Represent the interests of shareholders; and

Possess a willingness to appropriately challenge management in a constructive manner.

Leadership

(including, strategic

planning)

(14)

International / Global

Perspective

(12)

Financial Services /

Market Experience

(10)

Finance / Accounting

Expertise

(11)

Risk Management

(10)

Operations /

Technology

(10)

Talent

(management

development and

succession)

(11)

Public Policy /

Sustainability

(6)

Public Company

Experience /

Corporate Governance

(11)

Quick Facts on Our Director Nominees

13

Non-management

directors

4

Female directors

10

Directors who are

current or former CEOs

6

Directors born outside

of the United States

Elizabeth Corley, 63

Independent Director

Director Since: 2018

Morgan Stanley Committees:

•  Nominating and Governance

Alistair Darling, 66

Independent Director

Director Since: 2016

Morgan Stanley Committees:

•  Audit

• Risk

Qualifications, Attributes and Skills:

Qualifications, Attributes and Skills:

Ms. Corley’s leadership positions, including through her role as CEO of AllianzGI, bring to the Board extensive management experience as well as markets and financial services experience and international perspective.

Mr. Darling’s service as a former member of the British Parliament and as Chancellor of the Exchequer brings to the Board strong leadership, risk management and regulatory experience, as well as insight into both the global economy and the global financial system.

•  Non-executive Senior Advisor of AllianzGI from April 2019 to December 2019, Senior Advisor from April 2018 to April 2019, non-executive Vice Chair from March 2016 to March 2018, global CEO from January 2012 to February 2016 and European CEO from 2005 to 2011.

•  Held various leadership positions at Merrill Lynch Investment Managers (formerly Mercury Asset Management) from 1993 to 2004, including as Managing Director and Head of the EMEA Asia Pacific Mutual Fund Business.

•  Began her career at Sun Alliance Life & Pensions Limited and subsequently served as a consultant and then partner at Coopers & Lybrand Management Consultants (U.K.) from 1985 to 1993.

•  Served two terms as Chair of the Forum of European Asset Managers and served on the board of the Financial Reporting Council from 2011 to 2017.

•  Chair of Management Board of the U.K. Impact Investing Institute from June 2019.

Other U.S. Listed Public Company Boards:

Pearson plc

•  Appointed to the House of Lords on December 10, 2015. Previously a member of the British Parliament, serving as a member of the House of Commons from 1987 to 2015.

•  Held several leadership positions in the U.K. government, including as Chancellor of the Exchequer from 2007 to 2010, Secretary of State for Trade and Industry from 2006 to 2007, Secretary of State for Scotland from 2003 to 2006, Secretary of State for Transport from 2002 to 2006, Secretary of State for Social Security/Work and Pensions from 1998 to 2002 and Chief Secretary to the Treasury from 1997 to 1998.

Thomas H. Glocer, 60

Independent Lead Director

Director Since: 2013

Morgan Stanley Committees:

•  CMDS

•  Operations and Technology

James P. Gorman, 61

Chairman

Director Since: 2010

Qualifications, Attributes and Skills:

Qualifications, Attributes and Skills:

Mr. Glocer’s leadership positions, including in his capacity as Independent Lead Director appointed by our independent directors and as CEO of Thomson Reuters Corporation, bring to the Board extensive management experience as well as operational and technology experience and international perspective.

As CEO of the Company, Mr. Gorman is a proven leader with an established record as a strategic thinker backed by strong operating, business development and execution skills and brings an extensive understanding of Morgan Stanley’s businesses and decades of financial services experience.

•  Founder of Angelic Ventures, LP (Angelic), a family office focusing on early-stage investments in financial technology, cyber defense and media, and Managing Partner of Angelic since 2012.

•  Served as CEO of Thomson Reuters Corporation, a news and information provider for businesses and professionals, from April 2008 through December 2011 and as CEO of Reuters Group PLC from July 2001 to April 2008. Joined Reuters Group PLC in 1993 and served in a variety of executive roles before being named CEO.

•  Mergers and acquisitions lawyer at the law firm of Davis Polk & Wardwell LLP from 1984 to 1993.

Other U.S. Listed Public Company Boards:

Merck & Co., Inc.

•  Chairman of the Board and CEO of Morgan Stanley since January 2012. President and CEO from January 2010 through December 2011.

•  Co-President from December 2007 to December 2009, Co-Head of Strategic Planning from October 2007 to December 2009 and President and Chief Operating Officer of Wealth Management from February 2006 to April 2008.

•  Joined Merrill Lynch & Co., Inc. (Merrill Lynch) in 1999 and served in various positions, including Chief Marketing Officer, Head of Corporate Acquisitions Strategy and Research in 2005 and President of the Global Private Client business from 2002 to 2005.

•  Prior to joining Merrill Lynch, was a senior partner at McKinsey & Co., serving in the firm’s financial services practice. Earlier in his career, was an attorney in Australia.

Robert H. Herz, 66

Independent Director

Director Since: 2012

Morgan Stanley Committees:

•  Audit (Chair)

•  Nominating and Governance

Nobuyuki Hirano, 68

Non-management Director

Director Since: 2015

Morgan Stanley Committees:

•  Risk

Qualifications, Attributes and Skills:

Qualifications, Attributes and Skills:

Mr. Herz brings to the Board extensive regulatory, public accounting, financial reporting, risk management and financial experience through his private and public roles, including as Chairman of the Financial Accounting Standards Board.

In his role as Chairman and former President and Group CEO at MUFG and its associated companies, Mr. Hirano brings to the Board global leadership as well as international banking, financial services, risk management and regulatory expertise.

•  President of Robert H. Herz LLC, providing consulting services on financial reporting and other matters, since September 2010.

•  Chairman of the Financial Accounting Standards Board from July 2002 to September 2010 and a part-time member of the International Accounting Standards Board from January 2001 to June 2002.

•  Member of the Standing Advisory Group of the Public Company Accounting Oversight Board since 2012 and served on the Accounting Standards Oversight Council of Canada from 2011 to March 2017.

•  Partner in PwC, an accounting firm, from 1985 to 2002.

Other U.S. Listed Public Company Boards:

Federal National Mortgage Association (Fannie Mae) and Workiva Inc.

•  Chairman of MUFG, one of the world’s leading financial groups, since April 2019.

•  President and Group CEO of MUFG from April 2013 to March 2019, Director of MUFG Bank, the core commercial banking unit of MUFG, from June 2005 to March 2020, and Chairman of MUFG Bank from April 2016 to March 2019.

•  Director of MUFG since June 2010 and Deputy President from October 2010 to March 2012. President and CEO of MUFG Bank from April 2012 to March 2016 and Deputy President of MUFG Bank from June 2009 to March 2012.

•  Managing Officer of MUFG from 2009 to 2010, Senior Managing Director from 2008 to 2009 and Managing Director from 2006 to 2008 of MUFG Bank.

•  Numerous senior-level positions in Japan and abroad since joining The Mitsubishi Bank, Limited in 1974, including in the Corporate Planning Office and Corporate Banking Division of The Bank of Tokyo- Mitsubishi, Ltd.

•  Previously served as a director of Morgan Stanley from 2009 to 2011.

Other U.S. Listed Public Company Boards:

MUFG and Toyota Motor Corporation

Stephen J. Luczo, 63

Independent Director

Director Since: 2019

Morgan Stanley Committees:

•  Operations and Technology

Jami Miscik, 61

Independent Director

Director Since: 2014

Morgan Stanley Committees:

•  Operations and Technology (Chair)

• Risk

Qualifications, Attributes and Skills:

Qualifications, Attributes and Skills:

As the former CEO and current Chairman of Seagate, Mr. Luczo brings to the Board extensive leadership experience with expertise in information technology and technology disruption.

Ms. Miscik brings to the Board extensive leadership in navigating geopolitical, macroeconomic and technology risks through her private and public roles, including as CEO and Vice Chair of Kissinger and her service with the Central Intelligence Agency.

•  Managing Partner at Crosspoint Capital Partners, L.P., a private equity investment firm focused on the cybersecurity and privacy sectors.

•  Chairman of the Board of Seagate, a California-based leading provider of data storage technology and solutions, since 2002. Executive Chairman from October 2017 to October 2018.

•  Also served as CEO of Seagate from January 2009 to October 2017 and from July 1998 to July 2004.

•  Served as President and Chief Operating Officer from September 1997 to July 1998. First joined Seagate in October 1993 as Senior Vice President of Corporate Development.

•  Senior Managing Director of Global Technology Group of Bear, Stearns & Co. Inc., from February 1992 to October 1993.

•  Investment Banker at Salomon Brothers from 1984 to 1992.

Other U.S. Listed Public Company Boards:

AT&T Inc. and Seagate

•  CEO and Vice Chair of Kissinger, a New York-based strategic international consulting firm that assesses and navigates emerging market geopolitical and macroeconomic risks for its clients, since March 2017.

•  Co-CEO and Vice Chair of Kissinger from 2015 to 2017 and President and Vice Chair of Kissinger from 2009 to 2015.

•  Global head of sovereign risk at Lehman Brothers from 2005 to 2008.

•  Central Intelligence Agency from 1983 to 2005, serving as Deputy Director for Intelligence from 2002 to 2005.

•  Co-Chair of the President’s Intelligence Advisory Board from 2014 to 2017 and served as Senior Advisor for Geopolitical Risk at Barclays Capital.

Other U.S. Listed Public Company Boards:

General Motors Company

Other U.S. Listed Public Company Boards in the Past Five Years:

EMC Corporation

Dennis M. Nally, 67

Independent Director

Director Since: 2016

Morgan Stanley Committees:

•  Audit

•  CMDS

Takeshi Ogasawara, 66

Non-management Director

Director Since: 2019

Morgan Stanley Committees:

•  Operations and Technology

Qualifications, Attributes and Skills:

Qualifications, Attributes and Skills:

Mr. Nally brings to the Board over 40 years of regulatory, public accounting and financial reporting experience, including through his role as Chairman of PricewaterhouseCoopers International Ltd., as well as extensive technology and management experience.

As an advisor and former Deputy President of MUFG Bank, Mr. Ogasawara brings to the Board over 40 years of banking experience and international, risk management, compliance and strategic expertise.

Professional Experience:

•  Chairman of PricewaterhouseCoopers International Ltd., the coordinating and governance entity of the PwC network, from 2009 to July 2016.

•  Chairman and Senior Partner of the U.S. firm of PwC from May 2002 to June 2009.

•  Joined PwC in 1974 and became a partner in 1985, serving in numerous leadership positions within PwC, including National Director of Strategic Planning, Audit and Business Advisory Services Leader and Managing Partner.

Other U.S. Listed Public Company Boards:

AmerisourceBergen Corporation

Professional Experience:

•  Advisor to MUFG Bank since June 2016.

•  Director of Bank of Ayudhya Public Company Limited (Krungsri), a subsidiary of MUFG Bank in Thailand, from January 2014 to June 2018.

•  Deputy President of MUFG Bank from May 2012 to June 2016, and Head of Central Region of Japan of MUFG Bank from May 2012 to May 2016.

•  Chief Compliance Officer of MUFG Bank from May 2009 to May 2012.

•  Began his professional career at The Tokai Bank, Ltd., one of the legacy banks of MUFG Bank, in 1977

    Hutham S. Olayan, 66

    Independent Director

    Director Since: 2006

    Morgan Stanley Committees:

    •  CMDS (Chair)

Mary L. Schapiro, 64

Independent Director

Director Since: 2018

Morgan Stanley Committees:

•  Nominating and Governance

Qualifications, Attributes and Skills:

Qualifications, Attributes and Skills:

Ms. Olayan’s leadership positions, including as Chair of The Olayan Group’s board of directors and President and CEO of The Olayan Group’s U.S. operations, bring to the Board extensive management experience and her financial experience in the U.S. and internationally, including in the Middle East, strengthens the Board’s global perspective.

Ms. Schapiro’s leadership experience, including at the SEC, FINRA and the CFTC, brings to the Board extensive legal and regulatory compliance, finance, risk management, and public policy and government affairs experience as well as markets and financial services perspective.

•  Chair since October 2018, Vice Chair from January to October 2018 and principal and director since 1981 of The Olayan Group, a private multinational enterprise that is a diversified global investor and operator of commercial and industrial businesses in Saudi Arabia.

•  Served as President and CEO of The Olayan Group’s U.S. operations for almost 30 years until December 2017, overseeing all investment activities in the Americas.

•  Member of the Executive Advisory Board of General Atlantic and a former director of Thermo Electron Corporation.

Other U.S. Listed Public Company Boards in the Past Five Years:

International Business Machines Corporation

•  Vice Chair for Global Public Policy and Special Advisor to the Founder and Chairman of Bloomberg L.P. since October 2018.

•  Vice Chair of the Advisory Board of Promontory Financial Group LLC (Promontory), a leading strategy, risk management and regulatory compliance firm, since January 2014.

•  Managing director of Promontory from March 2013 to January 2014.

•  Chair of the Securities and Exchange Commission (SEC) from January 2009 to December 2012.

•  Chair and CEO of the Financial Industry Regulatory Authority (FINRA) from 2006 to 2008, and served in numerous other key executive positions at FINRA and its predecessor from 1996 to 2006, including Vice Chair and President of NASD Regulation.

•  Chair of the Commodity Futures Trading Commission (CFTC) from 1994 to 1996.

Other U.S. Listed Public Company Boards:

CVS Health Corporation

Other U.S. Listed Public Company Boards in the Past Five Years:

General Electric Company

Perry M. Traquina, 63

Independent Director

Director Since: 2015

Morgan Stanley Committees:

•  Audit

•  Risk (Chair)

Rayford Wilkins, Jr., 68

Independent Director

Director Since: 2013

Morgan Stanley Committees:

•  CMDS

•  Nominating and Governance (Chair)

Qualifications, Attributes and Skills:

Qualifications, Attributes and Skills:

Mr. Traquina brings to the Board extensive senior executive, regulatory and risk management experience, as well as investor perspective and market knowledge from his over 30 years at the global investment management firm Wellington.

Mr. Wilkins brings to the Board extensive management, technology and operational experience, as well as international perspective, through the various management positions he held at AT&T.

•  Chairman, CEO and Managing Partner of Wellington Management Company LLP (Wellington), a global, multi-asset investment management firm, serving from 2004 through June 2014 as CEO and Managing Partner and from 2004 through December 2014 as Chairman.

•  Partner, Senior Vice President and Director of Global Research at Wellington from 1998 to 2002 and President from 2002 to 2004.

•  Joined Wellington in 1980 and served in a number of executive roles before being named Chairman, CEO and Managing Partner.

Other U.S. Listed Public Company Boards:

The Allstate Corporation and eBay Inc.

•  CEO of Diversified Businesses of AT&T Inc. (AT&T), the telecommunications company, responsible for international investments, AT&T Interactive, AT&T Advertising Solutions and Customer Information Services from October 2008 to March 2012.

•  During his career, he served in numerous other management roles at AT&T, including as Group President and CEO of SBC Enterprise Business Services, Group President of SBC Marketing and Sales, and President and CEO of Pacific Bell Telephone Company and Nevada Bell Telephone Company.

•  Began his career at Southwestern Bell Telephone in 1974.

Other U.S. Listed Public Company Boards:

Caterpillar Inc. and Valero Energy Corporation

Directors may not stand for election if they will be 72 years old at the time of election.

Our Board conducts an ongoing review of Board composition and succession planning, resulting in substantial refreshment of the Board and a diversity of skills, attributes and perspectives on the Board.

Upon election at the annual meeting, the average tenure of the members of the Board will be approximately 5.4 years.

Our Board has a majority of independent directors. Our Chairman is the only member of management who serves as a director.

Our Independent Lead Director is selected from and by the independent directors and has expansive duties set forth in our Corporate Governance Policies. The Independent Lead Director chairs regularly scheduled executive sessions without the Chairman present. See “Board Leadership Structure and Role in Risk Oversight.”

Mr. Ogasawara was appointed a member of the Operations and Technology Committee.

Ms. Schapiro was appointed a member of the Nominating and Governance Committee and concluded service on the Operations and Technology Committee.

Mr. Luczo was appointed a member of the Operations and Technology Committee.

Conducts an annual strategy offsite with the CEO, Operating Committee and senior management to review the Company’s long-term strategy.

Receives regular reporting regarding strategy at Board meetings as well as by the CEO and Operating Committee outside of regularly scheduled meetings.

Reviews the Company’s annual strategic presentation to shareholders, which summarizes the Company’s progress on the prior year’s strategic plan, provides an overview of long-term strategic priorities and includes specific financial and non-financial goals. The Company’s 2020 strategic presentation is available at www.morganstanley.com/about-us-ir.

Board members meet with local management and independent control functions throughout the world and have visited several of our global offices.

The Independent Lead Director and committee chairs meet with management between regularly scheduled meetings for discussion of key items and to develop Board and committee agendas and provide feedback regarding information reported to the Board and on other topics to be reviewed.

The Company’s Chief Financial Officer (CFO), Chief Legal Officer (CLO) and Chief Risk Officer (CRO), as well as the heads of the Company’s operating units and other officers, regularly attend Board meetings and maintain an ongoing dialogue with Board members between Board meetings.

The CMDS Committee, in conjunction with the entire Board, annually reviews succession plans for the CEO and senior executives.

Duties and Responsibilities

Board Structure and Composition,
including Board Succession
Planning

Culture

Process

Information and Resources

Execution

Key Strengths/Areas for

Improvement

Areas of Focus

Our Corporate Governance Policies are consistent with the Investor Stewardship Group Corporate Governance Principles for U.S. listed companies.

All directors are elected annually; in uncontested director elections, directors are elected by a majority of votes cast.

Proxy access permits up to 20 shareholders owning 3% or more of our stock continuously for at least three years to nominate the greater of two directors or up to 20% of our Board and include those nominees in our proxy materials.

Our Board has an Independent Lead Director with expansive duties. See “Board Leadership Structure and Role in Risk Oversight — Independent Lead Director.”

Shareholders who own at least 25% of common stock have the ability to call a special meeting of shareholders.

There are no supermajority vote requirements in our charter or bylaws.

We do not have a “poison pill” in effect.

Shareholders and other interested parties may contact any of our Company’s directors.

Prohibits Morgan Stanley from making U.S. political contributions.

Provides that Morgan Stanley informs its principal U.S. trade associations not to use payments made by Morgan Stanley for election-related activity at the federal, state or local levels.

Provides that principal U.S. trade association memberships and expenditures relating to such memberships are reviewed annually with the Government Relations Department and the Nominating and Governance Committee.

Provides a link to examples of principal U.S. trade associations that the Company belongs to on the Company’s website.

Addresses oversight of lobbying activities, as well as expenditures related thereto, by the Vice Chairman of the Company who reports to the Chairman and CEO, and oversight of significant lobbying priorities and expenditures by the Nominating and Governance Committee.

Confirms that Morgan Stanley discloses publicly all U.S. federal lobbying costs as required by law, including dues attributable to lobbying by U.S. trade associations.

Provides that the Nominating and Governance Committee oversees the Corporate Political Activities Policy Statement and the activities addressed by it.

Sustainable

Solutions &

Services

Morgan Stanley is committed to harnessing the power of capital markets to create sustainable, long-term value for clients and stakeholders.

• We have mobilized approximately $80 billion towards our goal of $250 billion in low-carbon solutions by 2030, including over $50 billion in 2019.

• We announced the Morgan Stanley Plastic Waste Resolution, which aims to facilitate the prevention, reduction and removal of 50 million metric tons of plastic waste from entering rivers, oceans, landscapes and landfills by 2030.

• We supported over $24 billion in green, social, blue and sustainability bonds in 2019, bringing our total to over $83 billion since 2013.

• Morgan Stanley Wealth Management Investing with Impact client assets reached nearly $34 billion.

• Morgan Stanley Investment Management, a signatory to the Principles for Responsible Investment, engaged with over 600 companies on ESG issues ranging from sustainability reporting to plastic waste.

Institute for

Sustainable

Investing

Established in 2013, the Institute for Sustainable Investing (Institute) focuses on accelerating the adoption of sustainable investing across global markets. Chaired by Morgan Stanley’s Chairman and CEO, an advisory board of prominent leaders from business, academia and leading non-governmental organizations helps to ensure that our sustainability strategy is comprehensive, rigorous and innovative.

• In October 2019, the Institute hosted the inaugural Morgan Stanley Sustainable Investing Summit, which brought together over 100 clients from across our businesses to discuss the innovation and ideas reshaping capital markets.

Environmental and Social Risk

Management

Environmental and social risk management is a priority for Morgan Stanley. The Company’s due diligence and risk management processes are designed to identify, analyze and address potentially significant environmental and social issues that may confront us or our clients. Our processes include monitoring for emerging environmental and social risks and related trends, as well as engaging with clients and other stakeholders as appropriate.

• We met with leaders of indigenous tribes and other groups to discuss community and other environmental and social issues.

• We participated in a roundtable with environmental non-governmental organizations to discuss how financial institutions are addressing climate change.

Corporate

Sustainability

Morgan Stanley is committed to integrating ESG across our business activities and operations.

• We have enhanced our approach to disclosure in our annual Sustainability Report, aiming to follow the Sustainability Accounting Standards Board (SASB) guidance as appropriate to help deliver investor-relevant information.

• Corporate Services introduced a new Sustainability at Work program across our global operations, which seeks to reduce our operational environmental impacts and engage our employees in meeting our sustainability objectives.

• We are committed to achieving carbon neutrality across our global operations by 2022, including sourcing 100% of our global electricity needs from renewable energy.

• Information about our sustainability initiatives, including the Sustainability Report, is available at www.morganstanley.com/about-us/sustainability-at-morgan-stanley.

Volunteering

Giving/Initiatives

Community Development

• Employees logged over 509,000 volunteer hours for charities around the world in 2019.

• During the 2019 Global Volunteer Month in June, including the collective efforts from Feeding Kids Around the Clock, over 52,000 employees logged over 272,000 volunteer hours in 36 countries.

• Since inception in 2009, the Morgan Stanley Strategy Challenge has provided 142 nonprofit organizations with more than 108,800 hours of pro bono services valued at over $16.6 million.

• In 2019, employees, together with the Company, the Morgan Stanley Foundation and the Morgan Stanley International Foundation, donated nearly $106 million.

• The Morgan Stanley Foundation and Morgan Stanley International Foundation have granted nearly $5.5 million in 2019 to charities within the children’s health space focused on the fundamentals for children’s health including: wellness, nutrition and play.

• In early 2020, the Firm and Morgan Stanley Foundation launched the Morgan Stanley Alliance for Children’s Mental Health, which, with its nonprofit partner organizations, seeks to deliver positive, tangible impact on the critical challenges of stress, anxiety, and depression in children, adolescents and young people.

• Since 2010, we have committed $21 billion in community development loans and investments, funding more than 116,000 affordable housing units and helping to create or retain more than 140,000 jobs.

• Since 2010, we have made 246 small-business loans and investments totaling $321 million across the U.S., including $59 million in 2019.

•  Bylaws and Certificate of  Incorporation

•  Corporate Political Activities Policy Statement

•  Code of Ethics and Business  Conduct

•  Equity Ownership  Commitment

•  Policy Regarding Shareholder  Rights Plan

•  Charters for Board Committees

•  Environmental and Social Policies

•  Information Regarding the Integrity Hotline

A. Current

Relationships

A director will not be independent if:

(i) the director is a current partner or current employee of Morgan Stanley’s internal or external auditor;

(ii) an immediate family member of the director is a current partner of Morgan Stanley’s internal or external auditor;

(iii) an immediate family member of the director (a) is a current employee of Morgan Stanley’s internal or external auditor and (b) personally works on Morgan Stanley’s audit;
(iv) the director is a current employee, or an immediate family member of the director is a current executive officer, of an entity that has made payments to, or received payments from, Morgan Stanley for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of such other company’s consolidated gross revenues; or

(v) the director’s spouse, parent, sibling or child is currently employed by Morgan Stanley.

B. Relationships

within Preceding

Three Years

A director will not be independent if, within the preceding three years:

(i) the director is or was an employee of Morgan Stanley;

(ii) an immediate family member of the director is or was an executive officer of Morgan Stanley;

(iii) the director or an immediate family member of the director (a) was a partner or employee of Morgan Stanley’s internal or external auditor and (b) personally worked on Morgan Stanley’s audit within that time;

(iv) the director or an immediate family member of the director received more than $120,000 in direct compensation in any 12-month period from Morgan Stanley, other than (a) director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service) and (b) compensation paid to an immediate family member of the director who is an employee (other than an executive officer) of Morgan Stanley; or

(v) a present Morgan Stanley executive officer is or was on the compensation committee of the board of directors of a company that concurrently employed the Morgan Stanley director or an immediate family member of the director as an executive officer.

A. Equity Ownership

A relationship arising solely from a director’s ownership of an equity or limited partnership interest in a party that engages in a transaction with Morgan Stanley, so long as such director’s ownership interest does not exceed 5% of the total equity or partnership interests in that other party.

B. Other Directorships

A relationship arising solely from a director’s position as

(i) director or advisory director (or similar position) of another company or for-profit corporation or organization or

(ii) director or trustee (or similar position) of a tax-exempt organization.

C. Ordinary Course

Business

A relationship arising solely from transactions, including financial services transactions such as underwriting, banking, lending or trading in securities, commodities or derivatives, or from other transactions for products or services, between Morgan Stanley and a company of which a director is an executive officer, employee or owner of 5% or more of the equity of that company, if such transactions are made in the ordinary course of business and on terms and conditions and under circumstances (including, if applicable, credit or underwriting standards) that are substantially similar to those prevailing at the time for comparable transactions, products or services for or with unaffiliated third parties.

D. Contributions

A relationship arising solely from a director’s status as an executive officer of a tax-exempt organization, and the contributions by Morgan Stanley (directly or through the Morgan Stanley Foundation or any similar organization established by Morgan Stanley) to the organization are less than the greater of $1,000,000 or 2% of the organization’s consolidated gross revenues during the organization’s preceding fiscal year (matching of employee charitable contributions is not included in Morgan Stanley’s contributions for this purpose).

E. Products and

Services

A relationship arising solely from a director utilizing products or services of Morgan Stanley in the ordinary course of business and on substantially the same terms as those prevailing at the time for comparable products or services provided to unaffiliated third parties.

F. Professional,

Social and Religious

Organizations

and Educational

Institutions

G. Family Members

Any relationship or transaction between an immediate family member of a director and Morgan Stanley shall not be deemed a material relationship or transaction that would cause the director not to be independent if the standards in this Section 2 would permit the relationship or transaction to occur between the director and Morgan Stanley.

Commercial relationships (such as financial services offered by the Company to clients in the ordinary course of the Company’s business) in the last three years between Morgan Stanley and entities where the directors are employees

Director’s utilization of Morgan Stanley products and services offered by the Company as a client of the Company (such as Wealth Management brokerage accounts and investments in funds sponsored by the Company) in the ordinary course of the Company’s business on terms and conditions substantially similar to those provided to unaffiliated third parties (Messrs. Glocer, Herz and Luczo, Ms. Miscik, Mr. Nally, Ms. Olayan and Messrs. Traquina and Wilkins). In each case the provision of such products and services was in compliance with the Director Independence Standards and the NYSE rules and was considered immaterial to director independence.

All members of the Audit Committee, the CMDS Committee and the Nominating and Governance Committee satisfy the standards of independence applicable to members of such committees, including NYSE listing standards.

Each member of the CMDS Committee is a “non-employee director” as defined in Section 16 of the Securities Exchange Act of 1934.

The Board has determined that all members of the Audit Committee are independent and “financially literate” within the meaning of the NYSE listing standards and a majority of the members of the Audit Committee, including the Chair, Robert H. Herz, are “audit committee financial experts” within the meaning of the SEC rules.

All members of the Risk Committee and the Operations and Technology Committee are non-employee directors and a majority of the members of such committees satisfy the independence requirements of the Company and the NYSE, and the Risk Committee membership satisfies other applicable legal and regulatory criteria.

AUDIT COMMITTEE

Current Members

Robert H. Herz (Chair)

Alistair Darling

Dennis M. Nally

Perry M. Traquina

13 Meetings Held in 2019

Primary Responsibilities

•  Oversees the integrity of the Company’s consolidated financial statements and system of internal controls.

•  Oversees risk management and risk assessment guidelines in coordination with the Board, Operations and Technology Committee and Risk Committee.

•  Reviews the major legal and compliance risk exposures of the Company and the steps management has taken to monitor and control such exposures.

•  Selects, determines the compensation of, evaluates and, when appropriate, replaces the independent auditor.

•  Reviews and assesses the qualifications, independence and performance of the independent auditor, and pre-approves audit and permitted non-audit services.

•  Oversees the performance of the head of the Company’s Internal Audit Department (Global Audit Director), who reports functionally to the Audit Committee, and the internal audit function.

•  After review, recommends to the Board the acceptance and inclusion of the annual audited consolidated financial statements in the Company’s Annual Report on Form 10-K.

•  See also “Audit Matters.”

COMPENSATION, MANAGEMENT DEVELOPMENT AND SUCCESSION (CMDS) COMMITTEE

Current Members

Hutham S. Olayan (Chair)

Thomas H. Glocer

Dennis M. Nally

Rayford Wilkins, Jr.

8 Meetings Held in 2019

Primary Responsibilities

•  Annually reviews and approves the corporate goals and objectives relevant to the compensation of the CEO and evaluates his performance in light of these goals and objectives.

•  Determines the compensation of executive officers and other officers and employees as appropriate.

•  Administers the Company’s equity-based compensation plans and cash-based nonqualified deferred compensation plans.

•  Oversees plans for management development and succession.

•  Reviews and discusses the Compensation Discussion and Analysis with management and recommends to the Board its inclusion in the proxy statement.

•  Oversees the Company’s incentive compensation arrangements, including with appropriate input from the CRO, to help ensure that such arrangements are consistent with the safety and soundness of the Company and do not encourage excessive risk-taking, and are otherwise consistent with applicable related regulatory rules and guidance.

•  Reviews and approves the Company’s equity retention and ownership policies for executive officers and other officers and employees, as appropriate.

•  See also “Compensation Governance and Risk Management.”

NOMINATING AND GOVERNANCE COMMITTEE⁽¹⁾

Current Members

Rayford Wilkins, Jr. (Chair)

Elizabeth Corley

Robert H. Herz

Mary L. Schapiro

4 Meetings Held in 2019

Primary Responsibilities

•  Oversees succession planning for the Board and Board leadership appointments.

•  Reviews the overall size and composition of the Board and its committees.

•  Identifies and recommends candidates for election to the Board.

•  Oversees the orientation program for newly elected directors.

•  Reviews annually the Corporate Governance Policies.

•  Oversees and approves the process and guidelines for the annual evaluation of performance and effectiveness of the Independent Lead Director, the Board and its committees.

•  Reviews and approves related person transactions in accordance with the Company’s Related Person Transactions Policy.

•  Reviews the director compensation program.

•  Reviews the Company’s Corporate Political Activities Policy Statement and oversees political activities, the Company’s significant lobbying priorities and expenditures attributable to lobbying in the U.S., and expenditures related to principal U.S. trade associations.

•  Oversees the Company’s philanthropic programs and social responsibility, environmental and sustainability matters.

OPERATIONS AND TECHNOLOGY COMMITTEE⁽²⁾

Current Members

Jami Miscik (Chair)

Thomas H. Glocer

Stephen J. Luczo

Takeshi Ogasawara

6 Meetings Held in 2019

Primary Responsibilities

•  Oversees the Company’s operations and technology strategy, including trends that may affect such strategy.

•  Reviews the major operations, technology and operational risk exposures of the Company, including operational security, fraud, vendor, data protection, business continuity and cybersecurity risks, and the steps management has taken to monitor and control such exposures.

•  Reviews the operations and technology budget and significant operations and technology expenditures and investments.

•  Oversees risk management and risk assessment guidelines and policies regarding operations and technology risk.

•  See also “Board Leadership Structure and Role in Risk Oversight — Board Oversight of Cybersecurity Risk.”

RISK COMMITTEE

Current Members

Perry M. Traquina (Chair)

Alistair Darling

Nobuyuki Hirano

Jami Miscik

9 Meetings Held in 2019

Primary Responsibilities

•  Oversees the Company’s global ERM framework.

•  Oversees the Company’s capital, liquidity and funding planning and strategy.

•  Oversees the major risk exposures of the Company, including market, credit, model and liquidity risk, against established risk measurement methodologies and the steps management has taken to monitor and control such exposures and reviews significant new product risk, emerging risks and regulatory matters.

•  Oversees the risk identification framework.

•  Oversees the Company’s risk appetite statement, including risk tolerance levels and limits, and the ongoing alignment of the Risk Appetite Statement with the Company’s strategy and capital plans.

•  Reviews the contingency funding plan, effectiveness of the Company’s Basel III advanced systems, Comprehensive Capital Analysis and Review and the Company’s Title I Resolution Plan and Recovery Plan, as necessary.

•  Oversees risk management and risk assessment policies and guidelines.

•  Oversees the performance of the CRO (who reports to the Risk Committee and the CEO) and the risk management function.

•  See also “Board Leadership Structure and Role in Risk Oversight — Board Role in Risk Oversight.”

The composition of the Board;

The role of the Company’s Independent Lead Director;

The Company’s strong corporate governance practices;

The CEO’s working relationship with the Board; and

The challenges specific to the Company.

Board Governance and Leadership

Advising the Chairman and CEO

Board Effectiveness and

Succession Planning

• Preside at all meetings of the Board at which the Chairman is not present

• Have the authority to call, and lead, non-management director sessions and independent director sessions

• Help facilitate communication among the Chairman, the CEO and the non-management and independent directors, including serving as liaison between the Chairman and the independent directors

• Approve the types and forms of information sent to the Board

• Solicit the non-management directors for advice on agenda items for meetings of the Board and executive sessions to help facilitate Board focus on key issues and topics of interest to the Board

• Be available, if requested, to meet with the Company’s primary regulators

• Be available, if requested by major shareholders, for consultation and direct communication in accordance with the Corporate Governance Policies

• Communicate with the Chairman and the CEO between meetings and act as a “sounding board” and advisor

• Advise the Chairman and the CEO of the Board’s informational needs

• Collaborate with the Chairman and the CEO in developing the agenda for meetings of the Board

• Approve Board meeting agendas
and the schedule of Board meetings to assure that there is sufficient time for discussion of all agenda items

• Have authority to request inclusion of additional agenda items

• Communicate with the Chairman and the CEO and other members of management, as appropriate, about decisions reached, suggestions and views expressed by non-management directors in executive sessions or outside of Board meetings

• Lead the annual evaluation of the performance and effectiveness of the Board including consultation with each non-management director regarding Board performance and effectiveness and, as necessary, individual director performance

• Help facilitate the efficient and effective functioning and performance of the Board

• Help facilitate discussion and open dialogue among non-management directors during Board meetings, executive sessions and outside of Board meetings

• Consult with the Chair of the Nominating and Governance Committee on Board succession planning and Board Committee appointments

• Coordinate with the Chair of the Nominating and Governance Committee on recruiting and interviewing candidates for the Board

• Consult with the Chair of the CMDS Committee on the annual evaluation of the performance of the CEO

The Board has a majority of independent and non-management directors. Eleven of the 14 director nominees are independent as defined by the NYSE listing standards and the Company’s more stringent Director Independence Standards. Thirteen of the 14 director nominees are non-management directors. All of the Company’s directors are elected annually.

The Board’s key standing committees are composed solely of non-management directors. The Audit Committee, the CMDS Committee and the Nominating and Governance Committee are each composed solely of independent directors. The Operations and Technology Committee and the Risk Committee are chaired by independent directors, consist of a majority of independent directors and include only non-management directors. The committees provide independent oversight of management.

The Board’s non-management directors meet regularly in executive session. The non-management directors meet regularly in executive session without management present and, consistent with the NYSE listing standards, the independent directors meet in executive session. These sessions are chaired by the Independent Lead Director.

The CMDS Committee has the power to hire and fire independent compensation consultants, legal counsel, or financial or other advisors as it may deem necessary to assist it in the performance of its duties and responsibilities. The CMDS Committee has retained an independent compensation consultant, Pay Governance, to assist the CMDS Committee in collecting and evaluating external market data regarding executive compensation and performance and to advise the CMDS Committee on developing trends and best practices in executive compensation and equity and incentive plan design. In performing these services, Pay Governance attends meetings of the CMDS Committee regularly, including portions of the meetings without management present, and separately with the CMDS Committee Chair. Pay Governance is the CMDS Committee’s independent advisor and does not provide any other services to the Company or its executive officers that could jeopardize its independent status. The Company has affirmatively determined that no conflict of interest has arisen in connection with the work of Pay Governance as compensation consultant for the CMDS Committee.

The CMDS Committee regularly reviews (i) Company performance with respect to execution of strategic objectives and evaluates executive performance in light of such performance; (ii) executive compensation strategy, including the competitive environment and the design and structure of the Company’s compensation programs to ensure that they are consistent with and support our compensation objectives; and (iii) market trends and legislative and regulatory developments affecting compensation in the U.S. and globally.

Together with the CRO, the CMDS Committee oversees the Company’s incentive compensation arrangements to help ensure that such arrangements are consistent with the safety and soundness of the Company and do not encourage excessive risk-taking, and are otherwise consistent with applicable related regulatory rules and guidance. The CRO attends CMDS Committee meetings at least annually, and on an as needed basis, to discuss the risk attributes of the Company’s incentive compensation arrangements. The CRO reported to the CMDS Committee his conclusion that the Company’s current compensation programs for 2019 do not incentivize employees to take unnecessary or excessive risk and that such programs do not create risks that are reasonably likely to have a material adverse effect on the Company.

The CMDS Committee approves senior executive annual incentive compensation after a comprehensive review and evaluation of Company, business unit and individual performance for the year, and reviews these compensation decisions with our Board.

Together with senior management, the CMDS Committee oversees the Company’s controls regarding the year-end compensation process, which have been designed to be consistent with our regulators’ principles for safety and soundness, including policies and procedures for compensation plan governance, funding and allocating the incentive compensation pool and the use of discretion in determining individual incentive compensation awards; processes for identifying “risk-taking” employees; and processes to administer incentive compensation clawback and cancellation features.

Director

Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings

($)

Total

($)

Elizabeth Corley

Alistair M. Darling

Thomas H. Glocer

Robert H. Herz

Stephen J. Luczo^*

Jami Miscik

Dennis M. Nally

Takeshi Ogasawara^*

Hutham S. Olayan

Mary L. Schapiro

Ryosuke Tamakoshi^*

Perry M. Traquina

Rayford Wilkins, Jr.

Position

Board Member

80,000

Independent Lead Director

50,000

Committee Chairs

Audit and Risk Committees

40,000

All Other Committees

25,000