Purcell gets $113 million parachute

Chief executive resigned after bitter struggle for control of Morgan Stanley


NEW YORK - Philip J. Purcell's golden parachute has a platinum lining.

The board of Morgan Stanley has awarded Purcell, who retired as chairman and chief executive after a bitter struggle for control of the firm, an exit package worth an estimated $113.7 million.

The disclosure by the firm late yesterday came two days after it reported that John J. Mack signed a contract worth up to $25 million a year to return to Morgan Stanley as Purcell's successor.

Purcell leaves with a long list of parting gifts, including a departure bonus worth $42.7 million based on the company's performance through the second quarter of this year. That one-time cash payment, which was not in his original employment contract, is on top of $34.7 million of restricted stock and an estimated $20.1 million in stock options, based on yesterday's closing share price of $53.34, which he collected during his years at the firm. He also receives retirement benefits with a lump-sum value around $11 million.

Purcell is getting medical benefits every year for the rest of his life, $250,000 for living expenses, and an office and a secretary. In addition, Morgan Stanley will make $250,000 in charitable donations a year in his name.

The board negotiated the agreement before Purcell stepped down at the end of last month, according to a person briefed on the negotiations. The agreement also has a noncompetition provision that seeks to dissuade Purcell from joining one of 12 large financial services companies. It is unclear, however, if the contract would discourage him from a job at a hedge fund, consulting or private equity firm.

A Morgan Stanley spokesman said the company sought the agreement "to be fair, appropriate to the circumstances and consistent with past practice."

The board also agreed to new employment contracts with two top executives, including Stephen S. Crawford, who along with Zoe Cruz rallied behind Purcell after a group of former Morgan Stanley bankers called for his ouster this spring.

Crawford, who was named co-president of Morgan Stanley after a management shake-up in March, agreed to a contract guaranteeing him at least $16 million for the next two fiscal years. If he is terminated for good reason at any time - or if he simply decides to resign between now and Aug. 5 - he will be entitled to $32 million.

Cruz, Crawford's counterpart, discussed a similar employment contract with Morgan Stanley's board but made a decision not to enter an agreement, according to a person briefed on the negotiations. She is now working without a contract.

David H. Sidwell, Morgan Stanley's chief financial officer, agreed to a contract that will guarantee him at least $10.5 million, provided he stays through the middle of October.

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