Morgan Stanley said the U.S. tax overhaul reduced last year’s earnings by an additional $43 million and that it would adjust some pay awards so that executives weren’t hurt by the charge.
Net income for the full year was $6.11 billion, or $3.07 a share, according to a regulatory filing Tuesday. That’s 2 cents a share lower than what Morgan Stanley reported in January. The cut to fourth-quarter profit was 3 cents a share.
Morgan Stanley’s board also adjusted payouts of certain performance-linked restricted stock awards to its five top executives, according to the filing. The adjustment was made to offset the impact that the tax overhaul, passed in December, had on measures including return on equity and stock return, which determine how many shares the executives receive.
The new U.S. rules will benefit many of Wall Street’s banks, and Chief Financial Officer Jonathan Pruzan said that it could lead to an
increase in client activity for Morgan Stanley. The New York-based bank’s effective tax rate will be as low as 22 percent this year, down from more than 40 percent in 2017, according to the filing.