Morgan CEO Drops Pay Deal

John J. Mack, the new chairman and chief executive of Morgan Stanley, told employees he would no longer accept guaranteed minimum pay of $25 million a year, and instead would tie his compensation to the investment bank’s performance.

Mack announced his decision after signing a five-year contract earlier this week that linked his compensation to that received by CEOs of four big Wall Street rivals.

“I don’t want anyone to think that I am entitled to something that others are not,” Mack said in a letter. “That is why I have decided

Mack, named CEO on June 30, is trying to restore morale and improve performance after his predecessor, Philip J. Purcell, announced his retirement under pressure from shareholders amid a wave of defections of senior bankers.

On Thursday, Morgan Stanley said it had awarded Purcell a severance package worth more than $113 million.