Morgan Stanley defeats rebels at annual meeting

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The Independent Online

Morgan Stanley shareholders backed the leadership of John Mack, its chief executive, who yesterday promised to steer the financial giant through the worst period of market turmoil of his 40-year career.

A California pension fund failed in its attempt to generate a significant protest vote against the re-election of directors, who it said had led the company to underperform its peers during the onset of the credit crisis. Morgan Stanley's profits fell by 60 per cent last year and it took an $8bn hit from a bad bet on sub-prime mortgages.

Mr Mack said the credit crisis would continue to roil financial markets for another six months. The fall-out from the sub-prime market is nearly over, he said, but he still fears problems with commercial real estate mortgage derivatives and with European brokers.

Morgan Stanley will put its focus on cutting costs and preserving capital, said Mr Mack. "It's going to be a difficult year for the Street."

His re-election was supported by more than 90 per cent of shareholders. A vote to give shareholders more say on executive pay was also defeated, attracting the same level of support – just over a third of all votes – as it did last year.