AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 1/6 · 18/10/2026
Moat—
Insufficient evidence for every rubric criterion; no category score is inferred.
structural advantage · — · Sustained fee-based demand supports franchise value, but does not identify a demonstrated barrier to replication or substitution.
durability · — · Five years of positive fee-based flows establish persistent demand; the durability of a structural advantage remains unestablished.
customer dependency · — · Asset additions do not establish switching friction or customer dependence. Investment-management outflows also demonstrate that assets can leave.
erosion resilience · — · Strong recent results coexist with actual price competition. They do not establish protection against sustained technological or pricing erosion.
Pricing power—
Insufficient evidence for every rubric criterion; no category score is inferred.
realized pricing · 1/4 · Institutional Securities explicitly experiences price competition, and competitive dynamics have affected deposit pricing. Net interest revenue increased primarily through lending and deposit balances, which does not demonstrate pricing strength. Exact price changes and fee yields are unavailable.
retention · 3/4 · Five consecutive years with fee-based flows above $100 billion, followed by further additions in both 2026 quarters, strongly demonstrate repeat aggregate demand indirectly. This is not a measured retention rate; equity investment-management outflows limit the breadth of the conclusion.
margin resilience · 3/4 · Wealth Management's pre-tax margin rose from 27.2% in 2024 to 29.3% in 2025 and remained above 30% in both supplied 2026 quarters. Institutional earnings also grew faster than expenses. This demonstrates recent operating resilience, with favorable activity and asset levels contributing; it does not isolate pricing or establish resilience through a full downturn.
contractual freedom · — · Competitive pricing adjustments are disclosed, but customer contract terms, repricing rights and restrictions are not sufficiently described to assess contractual pricing freedom.
Predictability—
Missing exact annual revenue, free cash flow or FCF margin; operating cash flow and capex must both be reported for all five years.
Financial strength—
Missing required inputs: debtFcfGrade, netDebtEbitGrade, currentRatioGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- interestCoverageGrade
- 0.00
- cashInterestPaid
- 47096.00
- cashInterestCoverage
- -0.38
Capital allocation—
Missing required inputs: operatingReturn, cashConversionGrade. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year average dilution (%)
- -2.36
- 3-year average SBC / revenue (%)
- 2.84
Management69
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 3/4 · Actual repurchases of $3.25 billion in the first half of 2026 accompanied CET1 capital growth and a 14.9% ratio versus an 11.8% requirement. Actual 2025 dividends provide additional distribution evidence. These support disciplined capital management, without proving repurchase undervaluation or exceptional investment returns.
incentive alignment · 3/4 · Actual grants place CEO deferred compensation entirely in performance equity, with three-year performance conditions, retention requirements and cancellation provisions. Hedging and pledging prohibitions reinforce alignment. Future vesting and enforcement outcomes remain unproven.
execution · 3/4 · Sustained fee-based flows, continued 2026 asset additions, improving Wealth Management profitability and Institutional Securities growth demonstrate strong operating execution. Attribution to management is indirect because markets and client activity also contribute.
governance · 2/4 · Actual audit committee approvals and independent lead director sessions establish functioning oversight practices. Combined CEO and chairman roles concentrate authority, while the disclosed regulatory settlement tempers confidence in control effectiveness. Neither pending allegations nor the settlement alone establish companywide governance failure.
Evidence
Full-year fee-based flows of $160 billion exceeded $100 billion for the fifth consecutive year
Compensation discussion / 2025 Wealth Management operating performance · Filed 02/04/2026
The business added net new assets of $118 billion and fee-based asset flows were $54 billion.
Executive summary / first-quarter 2026 Wealth Management asset flows · Filed 05/05/2026
The business added net new assets of $148 billion and fee-based assets of $39 billion.
Executive summary / second-quarter 2026 Wealth Management asset additions · Filed 04/08/2026
We view Morgan Stanley’s talent and culture as a key competitive advantage enabling the Firm to achieve its potential and drive future success.
CEO letter / management assertion about talent and culture · Filed 02/04/2026
We also continue to experience price competition in our Institutional Securities business segment’s products.
Business / Competition / realized Institutional Securities price competition · Filed 19/02/2026
These factors, along with other developments, such as pricing changes to certain deposit types due to various competitive dynamics and central bank actions, have impacted our net interest income.
Wealth Management / net interest income / competitive deposit pricing · Filed 04/08/2026
June 2026 Form 10-Q 15 Table of Contents Management’s Discussion and Analysis Assets Under Management or Supervision Rollforwards1 $ in billions At March 31, 2026 Inflows2 Outflows3 Net Flows Distributions4 Market Impact and Other5 At June 30, 2026 Equity $ 221 $ 11 $ (23) $ (13) $ (1) $ 27 $ 235 Fixed Income 219 22 (14) 7 (1) 3 229 Alternatives and Solutions6 770 41 (29) 13 (1) 71 852 Long-Term AUM $ 1,210 $ 74 $ (66) $ 8 $ (3) $ 101 $ 1,316 Liquidity and Overlay Services 658 800 (774) 27 (4) 8 688 Total $ 1,868 $ 874 $ (840) $ 35 $ (7) $ 109 $ 2,004 $ in billions At March 31, 2025 Inflows2 Outflows3 Net Flows Distributions4 Market Impact and Other5 At June 30, 2025 Equity $ 250 $ 9 $ (12) $ (3) $ — $ 24 $ 271 Fixed Income 186 24 (17) 7 (1) 6 198 Alternatives and Solutions6 650 33 (25) 8 (1) 43 700 Long-Term AUM $ 1,086 $ 66 $ (54) $ 12 $ (2) $ 73 $ 1,169 Liquidity and Overlay Services 561 647 (670) (23) (4) 10 544 Total $ 1,647 $ 713 $ (724) $ (11) $ (6) $ 83 $ 1,713 $ in billions At December 31, 2025 Inflows2 Outflows3 Net Flows Distributions4 Market Impact and Other5 At June 30, 2026 Equity $ 253 $ 19 $ (43) $ (24) $ (1) $ 7 $ 235 Fixed Income 217 45 (33) 12 (2) 2 229 Alternatives and Solutions6 776 83 (60) 23 (3) 56 852 Long-Term AUM $ 1,246 $ 147 $ (136) $ 11 $ (6) $ 65 $ 1,316 Liquidity and Overlay Services 649 1,548 (1,513) 35 (7) 11 688 Total $ 1,895 $ 1,695 $ (1,649) $ 46 $ (13) $ 76 $ 2,004 $ in billions At December 31, 2024 Inflows2 Outflows3 Net Flows Distributions4 Market Impact and Other5 At June 30, 2025 Equity $ 259 $ 21 $ (28) $ (7) $ — $ 19 $ 271 Fixed Income 179 40 (29) 11 (2) 10 198 Alternatives and Solutions6 654 68 (51) 17 (3) 32 700 Long-Term AUM $ 1,092 $ 129 $ (108) $ 21 $ (5) $ 61 1,169 Liquidity and Overlay Services 574 1,340 (1,379) (38) (8) 17 544 Total $ 1,666 $ 1,469 $ (1,487) $ (17) $ (13) $ 78 $ 1,713 1.During the first quarter of 2026, certain products were reclassified among asset classes to more closely align reporting with underlying investment strategies, primarily reflecting a reclassification of certain tax-managed solutions from Equity to Alternatives and Solutions.
Investment Management / assets under management rollforwards · Filed 04/08/2026
In particular, the ability to execute securities, derivatives and other financial instrument trades electronically on exchanges, swap execution facilities and other automated trading platforms, and the introduction and application of new technologies, including generative artificial intelligence and tokenization, will likely continue the pressure on our revenues.
Business / Competition / electronic trading and technology pressure · Filed 19/02/2026
Our ability to sustain or improve our competitive position also depends substantially on our ability to continue to attract and retain highly qualified employees while managing compensation and other costs.
Business / Competition / employee retention and compensation costs · Filed 19/02/2026
Delivered record net revenues of $31.8 billion and pre-tax profit of $9.3 billion, resulting in a record pre-tax margin of 29.3% compared with 27.2% in 2024.
Compensation discussion / 2025 Wealth Management revenue, profit and margin · Filed 02/04/2026
•Wealth Management delivered net revenues of $8.5 billion and a pre-tax margin of 30.4% reflecting strong Asset management revenues, increased net interest income, and higher Transactional revenues.
Executive summary / first-quarter 2026 Wealth Management results · Filed 05/05/2026
•Wealth Management delivered net revenues of $8.9 billion, reflecting strong Asset management revenues, increased Net interest income and higher client activity, generating a pre-tax margin of 30.5%.
Executive summary / second-quarter 2026 Wealth Management results · Filed 04/08/2026
June 2026 Form 10-Q 9 Table of Contents Management’s Discussion and Analysis Institutional Securities Income Statement Information Three Months Ended June 30, % Change $ in millions 2026 2025 Revenues Advisory $ 798 $ 508 57 % Equity 851 500 70 % Fixed Income 788 532 48 % Total Underwriting 1,639 1,032 59 % Total Investment Banking 2,437 1,540 58 % Equity 6,300 3,721 69 % Fixed Income 2,455 2,180 13 % Other (152) 202 (175) % Net revenues $ 11,040 $ 7,643 44 % Provision for credit losses 71 168 (58) % Compensation and benefits 2,980 2,430 23 % Non-compensation expenses 3,727 2,934 27 % Total non-interest expenses 6,707 5,364 25 % Income before provision for income taxes 4,262 2,111 102 % Provision for income taxes 999 472 112 % Net income 3,263 1,639 99 % Net income applicable to noncontrolling interests 71 35 103 % Net income applicable to Morgan Stanley $ 3,192 $ 1,604 99 % Six Months Ended June 30, % Change $ in millions 2026 2025 Revenues Advisory $ 1,776 $ 1,071 66 % Equity 1,247 819 52 % Fixed Income 1,530 1,209 27 % Total Underwriting 2,777 2,028 37 % Total Investment Banking 4,553 3,099 47 % Equity 11,448 7,849 46 % Fixed Income 5,813 4,784 22 % Other (53) 894 (106) % Net revenues $ 21,761 $ 16,626 31 % Provision for credit losses 163 259 (37) % Compensation and benefits 6,244 5,284 18 % Non-compensation expenses 6,931 5,691 22 % Total non-interest expenses 13,175 10,975 20 % Income before provision for income taxes 8,423 5,392 56 % Provision for income taxes 1,795 1,168 54 % Net income 6,628 4,224 57 % Net income applicable to noncontrolling interests 142 91 56 % Net income applicable to Morgan Stanley $ 6,486 $ 4,133 57 % Investment Banking Investment Banking Volumes Three Months Ended June 30, Six Months Ended June 30, $ in billions 2026 2025 2026 2025 Completed mergers and acquisitions1 $ 320 $ 171 $ 652 $ 323 Equity and equity-related offerings2, 3 45 22 60 37 Fixed Income offerings2, 4 132 92 278 195 Source: LSEG Data & Risk Analytics as of July 1, 2026.
Institutional Securities / comparative income statements and transaction volumes · Filed 04/08/2026
Common Stock Repurchases Three Months Ended June 30, Six Months Ended June 30, in millions, except for per share data 2026 2025 2026 2025 Number of shares 8 8 18 16 Average price per share $ 197.64 $ 123.22 $ 181.21 $ 124.54 Total $ 1,500 $ 1,000 $ 3,250 $ 2,000 For additional information on our common stock repurchases, see Note 16 to the financial statements.
Liquidity and capital resources / completed common stock repurchases · Filed 04/08/2026
The Firm’s Regulatory Capital and Capital Ratios Risk-based capital Standardized $ in millions At June 30, 2026 At December 31, 2025 Risk-based capital CET1 capital $ 87,568 $ 83,153 Tier 1 capital 97,217 92,728 Total capital 108,916 103,449 Total RWA 589,397 552,515 Risk-based capital ratio CET1 capital 14.9 % 15.0 % Tier 1 capital 16.5 % 16.8 % Total capital 18.5 % 18.7 % Required ratio1 CET1 capital 11.8 % 11.8 % Tier 1 capital 13.3 % 13.3 % Total capital 15.3 % 15.3 % 1.Required ratios are inclusive of any buffers applicable as of the date presented.
Financial statement notes / actual and required regulatory capital ratios · Filed 04/08/2026
The Firm continued to increase returns to shareholders as the quarterly dividend increased by $0.075 per share for a fourth year in a row to $1.00, with total dividends paid in 2025 of $6.1 billion.
Compensation discussion / actual 2025 dividend distributions · Filed 02/04/2026
How We Ensure CEO Pay Is Tied to Long-Term Sustainable Value Creation Deferred Incentive Compensation ✔ 75% of 2025 CEO incentive compensation deferred with vesting in year three ✔ Subject to strong cancellation provisions and clawback policy ✔ No automatic vesting on change in control; double trigger in place Equity-Based Compensation ✔ 100% of 2025 CEO deferred incentive compensation equity-based ✔ Significant portion of equity-based compensation aligns employee and shareholder interests ✔ Share ownership and retention requirements; for CEO, 10x salary and 75% retained first five years; 50% thereafter Performance-Vested Equity Incentive Award ✔ 100% of 2025 CEO deferred incentive compensation is performance-vested, consistent with shareholder feedback ✔ Shares earned can range from 0 to 1.5x target based on three-year performance against robust absolute and relative ROTCE objectives, and up to 2.0x target for significant outperformance ✔ Absolute and relative ROTCE performance objectives ensure award continues to be in alignment with Firm performance and strategic objectives, while maintaining strong alignment with shareholder interests Best Practices ✔ Comprehensive provisions permit cancellation of awards and clawback policy requires repayment of previously awarded compensation, even absent misconduct ✔ Material risk, control and conduct issues factored into pay decisions, and compensation adjusted, if appropriate ✔ Robust prohibitions on pledging, hedging, selling short or trading derivatives ✔ No excise tax protection upon a change in control ✔ Formal annual compensation risk review ✔ CMDS Committee independent compensation consultant ✔ No golden parachutes ✔ No guaranteed bonuses ✔ No special severance 80 MORGAN STANLEY 2026 PROXY STATEMENT TABLE OF CONTENTS Compensation Matters Section 5.2 “CEO and Other NEO Pay Decisions” contains the compensation decisions (both the amount and mix of compensation elements) for each NEO.
Compensation discussion / CEO deferred compensation, performance conditions and ownership requirements · Filed 02/04/2026
For 2025, the CMDS Committee granted 100% of the CEO’s deferred incentive compensation in equity-based PSUs and 100% of each NEO’s deferred incentive compensation in equity-based RSUs and PSUs, aligning compensation with shareholders’ interests.
Compensation discussion / equity awards actually granted · Filed 02/04/2026
Prohibition Against Pledging and Hedging Firm policy prohibits directors, officers as defined by Section 16 of the Securities Exchange Act of 1934, including the Firm’s executive officers, and other members of the Firm’s Operating Committee from pledging, selling short, engaging in hedging strategies or trading derivatives involving Morgan Stanley securities, including securities granted in connection with compensation or otherwise held.
Ownership / prohibition against pledging and hedging · Filed 02/04/2026
In 2025 and 2024, all of Deloitte & Touche’s fees were approved by the Audit Committee.
Audit matters / actual audit committee fee approvals · Filed 02/04/2026
For instance, he leads executive sessions of the Board without the Chairman and CEO present and provides feedback to the Chairman and CEO, communicates regularly with the Chairman and CEO and provides suggestions and views to the Chairman and CEO.
Governance / independent lead director executive sessions · Filed 02/04/2026
Pick's 2025 compensation on its assessment of his outstanding performance during his second year as CEO and first year as Chairman of the Board, evidenced by the Firm’s exceptional results and Mr.
Compensation discussion / combined CEO and chairman roles · Filed 02/04/2026
Competition and Markets Authority announced a settlement with the Firm, as well as other financial institutions, in connection with its investigation of suspected anti-competitive arrangements in the financial services sector, specifically regarding the Firm’s activities concerning certain liquid fixed income products between 2009 and 2012.
Legal proceedings / U.K. Government Bond Matter settlement · Filed 04/08/2026
As described in Section 4.2 “How We Evaluate Market Pay,” the CMDS Committee determined that due to meaningful market movement in the pay of CEOs at the Firm’s Core Peers (Bank of America, Citigroup, Goldman Sachs, JPMorgan, and Wells Fargo) for 2024, 2025 being Mr.
Compensation discussion / named compensation benchmarking peers · Filed 02/04/2026
• Net new assets (NNA) represent client asset inflows, including interest, dividends and asset acquisitions, less client asset outflows, and excluding the impact of business combinations/divestitures and the impact of fees and commissions.
Explanatory notes / definition of net new assets · Filed 02/04/2026
Net interest revenues of $2,254 million in the current quarter and $4,424 million in the current year period increased 18% and 16%, respectively, compared with the prior year periods, primarily due to the cumulative impact of lending growth and higher average sweep deposits.
Wealth Management / observed net interest revenue growth and drivers · Filed 04/08/2026
•Non-compensation expenses of $5,715 million in the current quarter and $10,644 million in the current year period increased 19% and 14%, respectively, compared with the prior year periods, primarily due to higher execution-related expenses and increased technology spend.
Management discussion / execution expenses and technology spending · Filed 04/08/2026
and globally. In addition, restrictive laws and regulations applicable to certain global financial services institutions may prohibit us from engaging in certain transactions, impose more stringent capital and liquidity requirements, and increase costs, and can put us at a competitive disadvantage to competitors in certain businesses not subject to these same requirements.
Business / Competition / potential regulatory cost disadvantage · Filed 19/02/2026
