Morgan Stanley cuts down shareholder rebellion

Morgan Stanley (MS) chief John Mack has put down an uprising of restive shareholders. Mack and other members of the brokerage firm’s board were re-elected at Tuesday’s annual meeting, with each director getting at least 90% of votes cast. Shareholders also rejected a proposal that would have given them an advisory vote on executive pay.

“We appreciate the strong support that shareholders have shown for the board today through the re-election of our directors by substantial margins,” Mack said in a midmorning press release. “Our entire board is deeply engaged and intensely focused on building value for our shareholders through this unprecedented market environment.”

Shareholders including the California pension funds Calpers and Calstrs and the union pension adviser CtW Investment had said they would withhold votes from Mack and other directors because of Morgan Stanley’s poor performance. Mack said in Tuesday’s press release that Morgan Stanley “achieved the highest net income and ROE of any firm that has reported earnings to date” for the first quarter, but investors are still smarting from the firm’s big subprime-related writedowns back in the fourth quarter, which forced the firm to raise $5 billion in new capital from overseas investors.

The fact that Mack is back under the gun after just three years at the helm of Morgan Stanley has Dan Colarusso at Portfolio wondering what the big deal is about the guy anyway. “Morgan shares are now about where they were when Mack returned in 2005 - after having about one-third sheared from their value over the past four months,” he wrote last month. “Mack the Knife, indeed.”