updated 7/6/2005 1:02:04 PM ET 2005-07-06T17:02:04

John Mack, who returned last week from a four-year exile to become chief executive of Morgan Stanley, will earn a minimum of $25 million a year in total compensation, according to a regulatory filing late Tuesday.

Mack, whose contract runs through 2010, will receive no less than the lowest-paid among the CEOs of Goldman Sachs, Lehman Bros Inc., Bear Stearns & Co. and Merrill Lynch & Co., the filing said.

Morgan Stanley is also giving Mack 500,000 shares of restricted stock, worth $27 million at Morgan Stanley’s $53.77 closing stock price Tuesday. A fifth of those shares are vested, and another 20 percent will vest annually through the final year of his contract.

The deal covers five years through June 30, 2010, but after 2006, Mack has no guaranteed minimum total compensation, the company said. Mack’s annualized base salary under the deal will be at least $775,000.

Under terms of the deal, Mack will also receive retirement benefits as if he had not been ousted in 2001. That year Mack lost a power struggle with Philip Purcell, the CEO he replaced last week.

Merrill Lynch’s Stan O’Neal was the best-paid executive among the major Wall Street firms in 2004, earning a combined $32 million in salary, bonuses and stock compensation.

It was a year in which raises were the rage. And that included Purcell, who pocketed a 45 percent raise, which bumped him to $22 million in compensation.

Goldman Sachs CEO Henry Paulson earned $29.8 million. And Lehman Bros. chief Richard Fuld earned $26.3 million. The exception was at Bear Stearns, where chairman and CEO James Cayne received $24.7 million in salary, stock options and bonuses, down from the $27 million he earned in 2003. Bear Stearns’ profit rose nearly 15 percent during the year.

Mack’s guaranteed minimum of as high as $25 million a year for 2005 and 2006 also indicates he thinks it will take 18 months before he can be held accountable for the firm’s profits and stock price, said Alan Johnson, a New York City-based compensation consultant.

A Morgan Stanley spokesman declined to comment beyond the contents of the filing.

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