Morgan Stanley 2014 Annual Report Download - page 278

MORGAN STANLEY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table sets forth activity relating to the Company’s PSUs:
2014
Number of Shares
(in millions)
PSUs at beginning of period ...................................................... 4
Awarded ..................................................................... 2
Conversions to Common Stock ................................................... (1)
Canceled ..................................................................... (1)
PSUs at end of period ........................................................... 4
Deferred Cash-Based Compensation Plans. The Company maintains various deferred cash-based
compensation plans for the benefit of certain current and former employees that provide a return to the plan
participants based upon the performance of various referenced investments. The Company often invests directly,
as a principal, in investments or other financial instruments to economically hedge its obligations under its
deferred cash-based compensation plans. Changes in value of such investments made by the Company are
recorded in Trading revenues and Investments revenues.
The components of the Company’s deferred compensation expense (net of cancellations) are presented below:
2014 2013 2012
(dollars in millions)
Deferred cash-based awards(1) ........................................... $1,757 $1,490 $1,815
Return on referenced investments ......................................... 408 772 435
Total ............................................................ $2,165 $2,262 $2,250
(1) Amounts for 2014, 2013 and 2012 include $92 million, $78 million and $93 million, respectively, related to deferred cash-based awards
that were granted in 2015, 2014 and 2013, respectively, to employees who satisfied retirement-eligible requirements under award terms
that do not contain a service period.
The table above excludes deferred cash-based compensation expense recorded in discontinued operations, which
was approximately $7 million in 2012. See Note 1 for additional information on discontinued operations.
At December 31, 2014, the Company had approximately $346 million of unrecognized compensation cost related
to unvested deferred cash-based awards (excluding unrecognized expense for returns on referenced investments).
Absent actual cancellations and any future return on referenced investments, this amount of unrecognized
compensation cost will be recognized as $127 million in 2015, $76 million in 2016 and $143 million thereafter.
These amounts do not include 2014 performance year awards granted in January 2015, which will begin to be
amortized in 2015 (see below).
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