FORTUNE -- Just 10 days after its shareholder meeting on May 18, Morgan Stanley said it will raise its chairman's pay to $2 million on June 1 from $800,000, according to the company's 8-K filing. Would this have been material information to shareholders of Morgan Stanley who rejected the idea of an independent chair just 10 days earlier?
The proxy this year contained a proposal from shareholders that would have required the company to have an independent chair, rather than an executive chair, as Morgan Stanley (MS, Fortune 500) now has. "RESOLVED: That stockholders of Morgan Stanley ... ask the board of directors to adopt a policy that the board's chairman be an independent director who has not previously served as an executive officer of Morgan Stanley."
John Mack, the current chair of Morgan Stanley, was CEO before Mr. Gorman took that position at the start of 2010 and, therefore, can not be considered independent.
In arguing against the independent chair, the company wrote: "We have a strong and independent Lead Director ... [who] has responsibilities including: (i) presiding at all meetings of the Board at which the Chairman is not present; (ii) having the authority to call, and lead, sessions composed only of non-management directors or independent directors; (iii) advising the Chairman of the Board's informational needs; (iv) approving Board meeting agendas and the schedule of Board meetings and requesting, if necessary, the inclusion of additional agenda items; and (v) making himself available, if requested by major shareholders, for consultation and direct communication."
In other words, they have a lead director who takes on some of the normal functions an independent chair otherwise would. So what warrants this large pay raise for Mack as chairman -- more than double what he earned in salary as CEO in 2008 and 2009?
That's not clear.
"John J. Mack, the firm's chairman, led the [annual] meeting, surprising some shareholders who expected his successor as chief executive, James P. Gorman, to field questions. But Mr. Mack said that because shareholders would ask questions about last year's operations, he should field those queries. He also added that he has completely divorced himself from day-to-day management and does not attend corporate meetings," according to the New York Times' Dealbook. At the meeting, Mack was also reported to have said he would quit if he ever became an obstacle to Gorman.
In comparison to John Mack's new $2 million paycheck, last year Walter Massey, Bank of America's chair, earned $167,000 in fees and $333,000 in stock. Richard Parsons took all his fees in stock, earning $240,000 for his board service as chair at Citigroup in 2009.
But if Mr. Mack is not running the company, is divorced from day-to-day management, and doesn't attend corporate meetings, and the board already has a strong and independent lead director, what warrants a pay check 6 - 8 times that of the chairs of some other major banks, and much larger competitors?
It's a safe bet that the idea of a $1.2 million pay raise for Mr. Mack would have made for a much livelier discussion over the question of an independent chair at this year's annual meeting. Certainly knowing about potential plans to boost his pay to 2.5 times its current level would seem to be information shareholders might have liked to have - before they voted.
-- Eleanor Bloxham is CEO of The Value Alliance and Corporate Governance Alliance, a board advisory firm.