Good morning. This is Martin Cohen, Corporate Secretary of Morgan Stanley. Welcome to our 2025 Annual Meeting of Shareholders. This presentation by Morgan Stanley is copyrighted and proprietary, and all rights are reserved. Any recording, rebroadcast, or other use of this presentation in whole or in part without the prior written consent of Morgan Stanley is strictly prohibited. Today's meeting may include forward-looking statements. Please refer to our proxy statement, annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K for risks and uncertainties regarding such statements. If we experience technical difficulties that prevent us from continuing our virtual meeting today, the polls will be closed immediately, and votes received prior to the closing of the polls will be counted. The meeting will not be reconvened, and the vote results will be announced publicly.
Good morning. I am Ted Pick, Chairman and CEO of Morgan Stanley. I'll now call the annual meeting to order. On behalf of my fellow directors, I would like to welcome you all and thank you for joining us. With me today is Eric Grossman, Chief Legal Officer and Chief Administrative Officer; Sharon Yeshaya, Chief Financial Officer; and you just heard from Marty Cohen, Vice President Counsel, and Corporate Secretary. The director nominees who are standing for election with me today are also on the line. Their bios and board committee membership are set forth in our proxy statement, which is available on the virtual meeting website.
They include Tom Glocer, Independent Lead Director, Megan Butler, Bob Herz, Chair of the Audit Committee, Erika James, Hiro Kamezawa, Shelley Leibowitz, Jami Miscik, Chair of the Operations and Technology Committee, Masato Miyachi, Dennis Nally, Chair of the Compensation, Management Development and Succession Committee, Doug Peterson, Mary Schapiro, Perry Traquina, Chair of the Risk Committee, and Ray Wilkins, Chair of the Governance and Sustainability Committee. Representatives of Deloitte & Touche, our independent auditor, are also available to answer your questions. I'll now begin with some opening remarks. I'm honored to be presiding this year's annual meeting of shareholders as Chairman. This is my first time doing so after James Gorman officially stepped down from the board at the end of last year. I would personally like to thank James for his many contributions. He will always be a signature part of Morgan Stanley.
In 2024, the firm produced a return on average tangible common equity of 18.8% and diluted earnings per share of $7.95. Annual net revenues were a record $61.8 billion, and net income was $13.4 billion. We delivered growth across businesses and regions with consistent performance. Throughout the year, the firm continued to execute on its strategy of helping clients raise, manage, and allocate capital. Our business accomplishments and financial results were strong relative to our goals. Morgan Stanley is well positioned to continue to capitalize on the growth opportunities in our core businesses. The integrated firm will work with our clients to deliver on their strategic and financial objectives, bringing together our world-class wealth management and investment management franchises with our leading institutional securities franchise. Consistent execution across four pillars—strategy, culture, financial strength, and growth—will lay the foundation for the firm's continued success.
The wealth management and investment management businesses together held $7.9 trillion in client assets at the end of 2024. We are on track to achieving our goal of $10 trillion+ . These businesses are diversified and scaled, positioning us well for growth. Collectively, these businesses generate tailwinds to increasing durable fee-based revenues and compounding overall assets. Morgan Stanley continues to invest in its world-class investment bank. We possess a preeminent global investment banking franchise offering trusted advisory and underwriting capabilities alongside a leading global markets business offering access, trading, and risk management capabilities. With united leadership across our banking, markets, and research franchises, Morgan Stanley capitalized on an improved capital markets backdrop in 2024 to deliver strong results. In addition to strong and durable earnings, we accreted capital and diligently managed our resources to realize operating leverage. We ended 2024 with a common equity tier one ratio of 15.9%.
Our capital position is robust, providing us flexibility to support clients and to invest in our businesses. The first quarter of 2025 was very strong, producing a 23% return on average tangible common equity. We delivered these results while supporting clients, buying back stock opportunistically, and building an additional $2 billion of capital. Over the last five quarters, we have grown our equity capital base by about 10%. Our focus on clients, combined with discipline around capital, risk, headcount, and investment, have generated consistently strong earnings over the last five quarters. In the short term, we are anticipating a period of adjustment where the outlook is less predictable. As the year progresses, markets will calibrate further clarity on trade policy alongside the tax and deregulatory pillars of the U.S. agenda as it seeks to rebalance the fiscal and trade equations.
It is in such moments of higher volatility and uncertainty that clients most value Morgan Stanley's global reach and depth, our trusted insights and advice, our capital markets access, and our execution capabilities. Over the last 15 years, we've formulated a clear and consistent strategy, and now we are executing on it. Our approach is to continue to capitalize on the secular long-term growth drivers across the wealth and investment management businesses and across our global investment bank. 2024 was one of the best years in Morgan Stanley's history, and we intend to continue to deliver for shareholders over the very long term. Today, Morgan Stanley is better positioned to serve our clients and deliver strong returns to our shareholders than at any point in our 90-year history. We have a well-defined strategy across the integrated firm.
We have an experienced and stable management team and a deep bench of talent. We have a culture of rigor, humility, and partnership. The integrated firm brings together a world-class wealth and investment manager with a leading investment bank. While we are rightly focused on near-term uncertainties and disruptions in the markets, our approach is to prudently plan for the longer-term horizon. I would like to take this opportunity to thank the board of directors for their support, guidance, and commitment. The board is actively engaged throughout the year, and the operating committee is grateful to all our directors for helping position Morgan Stanley for long-term success. Steve Luczo stepped down from our board at the end of last year after more than five years of service. We thank Steve for his dedicated service and many contributions to the board.
Please join me in welcoming Douglas Peterson, who is standing for election to the board today. Doug has 40 years of experience in the financial services industry and brings an international financial markets perspective. As the former Chief Executive Officer of S&P Global, Doug has extensive leadership and strategy experience, a distinguished reputation in Japan and around the world, and will be an excellent addition to our board. Thank you for your ownership and support of Morgan Stanley. I'll now turn it over to Marty to proceed with the remaining items on today's agenda.
Thank you, Ted. Thank you to our shareholders joining us today. American Election Services, the inspector for elections for this meeting, is represented by Christopher Woods. The inspector of elections has taken the oath of office, and a copy of his oath will be filed with the meeting minutes. He has determined that we have a quorum to conduct business at this meeting. First, I will review the meeting rules and procedures. We will consider the proposals that are being voted on, and I will deliver the preliminary report of the inspector of elections. That will conclude our formal meeting. As set forth in our meeting rules that are posted on the virtual meeting website, shareholders may submit questions pertaining to the proposals by typing them in the space provided on the virtual meeting screen.
Shareholders may also submit questions on topics other than the proposals being voted on that will be addressed during the general question-and-answer session. In order to give as many shareholders as possible the opportunity to ask questions, we ask that shareholders limit themselves to two questions. If we receive questions from multiple shareholders on substantially the same topic or that are otherwise related, we may group such questions and provide a single response to avoid repetition. Please limit your questions to a few sentences. We may paraphrase or summarize lengthy questions. We ask that shareholders include their name and, if applicable to their company, in the field provided when submitting questions. Per our meeting rules, questions that are submitted anonymously will not be addressed.
I now move the following company-sponsored proposals that appear in the proxy statement: the election of your directors, the ratification of the Audit Committee's appointment of Deloitte & Touche LLP as the company's independent auditor for 2025, the approval of compensation of executives as disclosed in the proxy statement, and the approval of the Amended and Restated Equity Incentive Compensation Plan. Next is the shareholder proposal. Ms. Jennifer Konowitz of the New York City Controller's Office submitted an audio presentation in support of the shareholder proposal requesting disclosure of an Energy Supply Ratio.
Good morning, Mr. Chair, members of the board, and fellow shareholders. I'm presenting item five on behalf of Controller Lander and the New York City Retirement Systems. Item five requests disclosure of Morgan Stanley's Energy Supply Ratio, or ESR, a straightforward dollar-based metric showing how much financing it directs to the low-carbon energy supply versus the fossil fuel energy supply. Morgan Stanley plays a major role in global energy finance and the energy transition. While it is committed to net-zero financed emissions by 2050, it is its lending and underwriting decisions in the near term that will determine whether that goal is achievable. ESR is a dollar-based disclosure that reflects actual financing flows, not client-reported emissions or estimates. It complements financed emissions disclosures by giving investors a clearer, more concrete view of Morgan Stanley's real-world energy financing priorities.
Morgan Stanley itself has acknowledged both the risks of climate change and the opportunities presented by the climate transition in its disclosures. Since last year's annual meeting, industry developments have strengthened the investor case for ESR disclosure. In the first instance, several top 20 fossil fuel financers, including Citi and JPMorgan , have committed to ESR disclosure. In fact, JPMorgan now discloses its ESR, describing it as an insightful metric for its stakeholders that is also consistent with how it makes financing decisions, and thus underscoring the ESR's feasibility and value to shareholders. Bloomberg NEF has published an ESR implementation guide, providing a methodology and clear definitions for both low-carbon and fossil fuel financing. However, Bloomberg estimates do not include lending and rely solely on public information. A bank calculated ESR using internal data rather than third-party estimates like Bloomberg's will enhance the metric's transparency and accountability.
Also, the Institute of International Finance has released a white paper outlining key considerations for evaluating ESR disclosure and offering a potential standardized disclosure format. Meanwhile, Morgan Stanley's exit from the net-zero banking alliance, the SEC's rollback of mandatory climate disclosure rules, and the EU's delay of the CSRD underscore the growing importance of voluntary, reliable climate-related transparency. Finally, and importantly, we note that the proposal is not prescriptive. It affords Morgan Stanley full flexibility in how to calculate its ESR. It doesn't set targets nor restrict any of its financing activities. It simply provides shareholders the insight needed to evaluate the company's climate-related risks, opportunities, and priorities. We urge the board to reconsider its opposition and for shareholders to vote for item five. Thank you.
Thank you, Ms. Konowitz. The board of directors recommends that stockholders vote against this proposal for the reasons set forth in our proxy statement. All proposals on the agenda are now before the meeting. We will now address any questions on the proposals. I will turn it over to Eric Grossman, our Chief Legal Officer and Chief Administrative Officer. Eric, do we have any questions on the proposals?
Yeah, Marty, we have one question on the proposal from shareholder Willor. Mr. Willor, I would refer you to page 120 of the proxy in which a management view with respect to the issue in the shareholder proposal is outlined. Other than that, we have no questions.
Thank you, Eric. The voting has now ended and the polls are closed. I will now present the preliminary report of the inspector of elections. The preliminary report of the inspector of elections indicates that at least 94% of the votes cast for and against have voted for the election of each director nominee. Approximately 96% of the votes cast have voted for the ratification of the Audit Committee's appointment of Deloitte & Touche LLP as the company's independent auditor for 2025. Approximately 95% of the votes cast have voted for the approval of the compensation of executives as disclosed in the proxy statement. Approximately 79% of the votes cast have voted for the approval of the Amended and Restated Equity Incentive Compensation Plan. Approximately 13% of the votes cast have voted for the approval of the shareholder proposal requesting disclosure of a clean energy supply ratio.
That proposal does not pass. That summarizes the preliminary report of the inspector of elections. The official report of the inspector of elections will be reported on a Form 8-K filed with the SEC.
Thank you, Marty. Congratulations to my fellow directors, and thank you, shareholders, for your continued support. This concludes the formal part of our annual meeting, and the annual meeting is now adjourned. We will now proceed to the general question-and-answer session. I will turn it over to Eric Grossman, our Chief Legal Officer and Chief Administrative Officer. Eric, do we have any questions?
Yes, Ted, we have two questions, both on the same topic with respect to diversity and inclusion. If it's okay with you, Mr. Chair, I will answer these questions.
Please.
I'll summarize the questions. They basically ask about our diversity and inclusion program here. What I would say is that our people here at Morgan Stanley are our greatest asset, and we continue to invest in our talent and in our culture. We believe an inclusive workplace where everyone can succeed is critical to the ongoing success of our integrated firm, our ability to serve our clients, and to deliver strong returns for our shareholders. Meritocracy is at the heart of Morgan Stanley's talent development, a workforce that represents the societies in which we live and work, and our global client base is integral to our continued success. We continue to invest in efforts to recruit, advance, and retain the most talented workforce through a holistic approach that centers on professional development, wellness, and a culture that allows every employee to thrive. Other than those two questions, Mr. Chair, we have no additional questions. I believe we can conclude the question-and-answer session of the shareholder meeting.
Thank you, Eric. I would like to thank our shareholders for their continued support of Morgan Stanley. The board is honored to serve you. Thank you, everyone.
The meeting has now concluded. Thank you for joining. You may now disconnect.