Good morning. This is Ted Pick, Chairman and Chief Executive Officer of Morgan Stanley. I'll now call the annual meeting of shareholders 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 Martin Cohen, Vice President, Counsel, and Corporate Secretary, who will lead us through the formalities. Eric Grossman, Executive Vice President, Chief Legal Officer, and Chief Administrative Officer, who will be reading questions submitted by our shareholders. Sharon Yeshaya, Executive Vice President, Chief Financial Officer. The director nominees who are standing for election with me are also joining us today. Their bios appear in our proxy statement.
They are Tom Glocer, Independent Lead Director, Megan Butler, Lynn Good, Robert Herz, Chair of the Audit Committee, Yasushi Itagaki, Erika James, Hironori Kamezawa, Shelley Leibowitz, Jami Miscik, Chair of the Operations and Technology Committee, Dennis Nally, Chair of the Compensation Management Development and Succession Committee, Doug Peterson, Mary Schapiro, Perry Traquina, Chair of the Risk Committee, and Rayford Wilkins, Chair of the Governance and Sustainability Committee. Representatives of Deloitte & Touche, our independent auditor, are also available to answer your questions.
Now to the CEO report to shareholders. Morgan Stanley delivered record revenues and net income in 2025. This outstanding performance reflects the deliberate execution of our strategy, the strength of our diversified business model, and the extraordinary talent of our people. The firm's trusted advisor franchise delivered growth across businesses and regions with consistent performance throughout the year, demonstrating our ability to execute across the integrated firm.
Morgan Stanley produced full-year net revenues of $70.6 billion, diluted earnings per share of $10.21, and a return on average tangible common equity of 21.6%. Total client assets reached $9.3 trillion, marking another year of significant growth. Our strategy is working. The transformation of Morgan Stanley over the past decade and a half has produced a global diversified franchise that performs durably across varying markets. Our integrated firm's business model with a scaled wealth and investment manager alongside a leading global investment bank compounds earnings in a capital efficient way. Over the last nine quarters across periods of both opportunity and uncertainty, we delivered consistent results, a blueprint for Morgan Stanley's success. We are executing across the four pillars of the integrated firm, strategy, culture, financial strength, and growth to drive long-term value for shareholders.
Wealth Management delivered another record year in 2025, driven by strong engagement across the financial advisor, workplace, and E*TRADE channels. Our Wealth Management business is built for scale and performance. Strong net new assets and fee-based flows reflected the strength of our client relationships and the successes of our client acquisition funnel. Institutional Securities delivered record revenues last year, benefiting from deep client relationships and a global footprint across the Investment Bank. Equitization of Global Markets, capital formation, and structuring across asset classes and cross-border M&A are at the core of our global capabilities. We're investing in this business that will accelerate our ability to offer clients best-in-class access, execution, and advice. Combined with continued share gains in Institutional Securities, we're well-positioned for the global investment banking and capital market cycle in 2026 and beyond.
In investment management, ongoing demand for Parametric customized portfolios and fixed income strategies supported long-term net inflows. Our capital position remains strong. The firm ended last year with a standardized CET1 ratio of 15.0%, providing scope for ongoing investment in clients and technology across the integrated firm while supporting continued dividend growth and disciplined allocation of capital. Morgan Stanley entered 2026 from a position of strength, and the first quarter results demonstrated the capabilities of our integrated firm. Consistent execution the last 2+ years is the proof of Morgan Stanley's ability to deliver on a higher plane of performance. As I wrote in our annual letter to shareholders, we remain mindful of the known unknowns of 2026, the accelerating adoption of AI at the enterprise level, and ongoing geopolitical uncertainties. Against this backdrop, our approach is of measured confidence.
Our institutional and wealth clients demonstrate continued resilience and continue to seek the depth and breadth of content and market access that Morgan Stanley provides. At the same time, we remain vigilant in the context of higher asset prices, tighter credit spreads, and interest rate path uncertainty. We will endeavor to navigate the upcoming period with the same level of intensity and execution that has defined our performance over the last nine quarters. Morgan Stanley benefits from a seasoned and highly capable board of directors, guided by Independent Lead Director Tom Glocer. The operating committee greatly values their insight, direction, and ongoing partnership. The board remains deeply engaged throughout the year on the firm's strategic priorities, including our approach to risk management and resilience.
During 2025, we added to our board of directors Lynn Good, former Chair and Chief Executive Officer of Duke Energy, and Doug Peterson, former Chief Executive Officer of S&P Global, to our board. They bring additional depth as successful leaders of world-class organizations. Masato Miyachi is stepping down from our board today. We thank him for his many miles of travel and for his dedication and contributions to the board, including serving on the Operations and Technology Committee. The board has nominated Yasushi Itagaki for election as an MUFG director representative and will benefit from his many years of international banking experience. Morgan Stanley is a special place, driven by the grit and optimism of our colleagues around the world. I'm confident that our culture of rigor, humility, and partnership will keep us grounded and guide us to continued success in the decades to come.
Thank you for your ownership and support of Morgan Stanley. I'll now turn it over to Marty to run through the logistics of today's meeting.
Thank you, Ted. We will conduct the meeting in accordance with the agenda and rules and procedures available on our annual meeting portal. American Election Services, the Inspector of Elections for this meeting, is represented by Christopher Woods and has determined that a quorum is present. The polls are now open. We will consider the proposals that are being voted on, and you may ask questions on the proposals. We will close the polls, and I will deliver the preliminary report of the Inspector of Elections. That will conclude our formal meeting. We will have a general question and answer session. If you have a general question, please wait until then to raise it. In order to give as many shareholders as possible the opportunity to ask questions, we will limit shareholders to two questions.
Please state your name and, if applicable, your company, and limit your question to one or two sentences. We may paraphrase or summarize lengthy questions. Questions from multiple shareholders that are similar or related may be grouped, summarized, and answered together to avoid repetition. If we experience technical difficulties that prevent us from continuing our virtual meeting today, the polls will close 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. Today's meeting may include forward-looking statements. Please refer to our SEC filings, including our 10-K, on our investor relations website for risks and uncertainties regarding such statements.
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 2026, and the approval of compensation of executives as disclosed in the proxy statement. Next is the shareholder proposal. Mr. John Chevedden will present the shareholder proposal requesting an Independent Board Chairman. Mr. Chevedden?
Hello, this is John Chevedden, proposal 4, Independent Board Chairman. Shareholders request the Board of Directors adopt an enduring policy and amend the governing documents, including the Corporate Governance Guidelines, in order that two separate people hold the office of the Chairman and the office of the CEO. The Chairman of the Board shall be an independent director. An Independent Lead Director shall not be a substitute for an Independent Board Chairman. Board shall have the discretion to select an interim Chairman of the Board who's not an independent director to serve while the Board is required to seek an Independent Chairman of the Board on an accelerated basis. An Independent Board Chairman at all times improves Corporate Governance by bringing impartiality, objective oversight, and external expertise to Board decisions, mitigating conflicts of interest, enhancing transparency, and boosting shareholder confidence.
This detached perspective allows the chairman to focus on shareholder interests, strengthen management accountability, and provide critical checks and balances, ultimately contributing to long-term sustainability and profitability. An Independent Board Chairman can also help Morgan Stanley deal with recent headwinds. Morgan Stanley financial strength is rated low due to high debt levels. Morgan Stanley profitability is constrained by high operating expenses and slow deal activity. Concerns about inflation, geopolitical risk, and high interest rates have raised concerns about the long-term sustainability of Morgan Stanley earnings. Please vote yes, Independent Board Chairman proposal 4.
Thank you, Mr. Chevedden. 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?
Thanks, Martin Cohen. We do have one question on the proposal, John Chevedden's proposal, from shareholder Ken Rogers. He asks us if we would provide specific details as to why the Board is against the shareholder proposal requesting an Independent Board Chairman. I would respectfully refer shareholder Rogers to pages 117 and 118 of our proxy statement. Other than that, let me just check one more time. No, there are no questions, Martin Cohen, on the proposals. No further questions.
Thanks, 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 as the company's independent auditor for 2026. Approximately 96% of the votes cast have voted for the approval of the compensation of executives as disclosed in the proxy statement. Approximately 27% of the votes cast have voted for the proposal of the shareholder proposal requesting an Independent Board Chairman. 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'll now proceed to the general question and answer session. Mr. Grossman, do we have any questions?
Thank you, Mr. Pick. We have two questions which I do not qualify pursuant to our rules because the shareholder did not identify themselves. We do have a question from shareholder Will van de Pol. Mr. van de Pol writes, "Regarding Morgan Stanley's thermal coal financing policy, as stated in the environmental and social policy statement, can you please confirm that quote, diversification, end quote, means a company lowering its revenue from thermal coal mining below the 20% threshold specified in the policy?" Further asks, "Would the company also need a strategy reduce thermal coal production in absolute terms?" I'll take that question, if that's okay, Mr. Pick. The first, with respect to the first half of the question, yes, I can confirm that's what the policy means.
With respect to the second question, I would say that there are a variety of factors we consider in evaluating our clients and strategy is one of those factors. We have not a question, but a comment from shareholder Isaac Willour. He writes, "Thank you for the constructive and positive engagement with shareholders. We consider our engagement earlier this season an excellent example of effective investor-company dialogue, and particularly appreciate the good faith sentiment you bring to the table." I see, I'm just checking one more time, there are no additional questions from our shareholders.
Well, on behalf of the management team and the board, I would like to thank our shareholders for their continued support of Morgan Stanley. The board and the team is honored to serve you. Thank you, everyone.
This now concludes the meeting. Thank you for joining, and have a pleasant day.