James Gorman, the chief executive officer of Morgan Stanley (NYSE:MS), earned a total of $13 million in compensation last year- that’s about 25% less than what he made the previous year which was $15.19 million. This news came from a proxy statement that was filed with Securities and Exchange Commission on Thursday.

His pay included $5.9 million in stocks, $3.5 million in option awards, $2.7 million in bonuses, and $800,000 in salary/miscellaneous earnings. The base salary for Gorman was unchanged from the prior year.

Morgan Stanley mentioned the following about the compensation numbers :

Despite the Company’s improved performance and the progress achieved in executing it’s strategy in 2011 under his leadership, Mr. Gorman’s compensation for 2011 was 25% below the level of 2010, reflecting the fact that the Company did not fully meet certain financial priorities for the year.

The last few years have been rather rough on big companies like Morgan Stanley, and Gorman’s pay cut reflects that. He wasn’t the only executive from Morgan Stanley who took a huge pay loss just this past year. CFO Ruth Porat’s pay decreased from $11.71 million to $11.4 million.

Overall, the company’s profits last year declined by 13% to $4.11 billion. This number was essentially due to trading revenue increases and did not include accounting gains.  Perhaps next year will be better for the company. So far,  shares for Morgan Stanley rose up to 24% .

Morgan Stanley also disclosed last year’s salary earning of other executives; Colm Kelleher, securities group co-head  had one of the highest salaries, coming in at $13.8 million. Paul Tubman, the group’s co-head earned $12.6 million.

Gorman’s pay rate is significantly less than those of most bank chief executives. Jamie Dimon of JP Morgan Chase earned $23.1 million, and John Stumpf of Wells Fargo earned $19.8 million.

The executive pay cuts could end up hurting Morgan Stanley in the long run, especially if their current executives find new job opportunities at other financial institutions.