Item 5.02(e). Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

The Compensation, Management Development and Succession Committee of the Board of Directors (the "Committee") of Morgan Stanley (the "Company") approved the terms of the Morgan Stanley Compensation Incentive Plan (the "Plan"), a long-term incentive plan of the Company that provides for a participant's award to be credited to an account maintained on the books and records of the Company for such participant. The amounts in the accounts will be notionally allocated to one or more notional investments or earn interest at a fixed interest rate and will be paid in cash after vesting and other restrictions have been satisfied. A participant's account will represent at all times an unfunded, contingent and unsecured contractual obligation of the Company.

On December 18, 2008, the Committee approved grants under the Plan to certain of the Company's named executive officers, other than John Mack (Chairman and CEO), Walid Chammah (Co-President) and James Gorman (Co-President) who will receive no bonus for 2008. These grants are subject to vesting and other restrictions similar to those applicable to the Company's equity compensation awards, including a "clawback" provision that could be triggered if the participant engages in certain conduct detrimental to the Company.

The above summary is qualified by the entirety of the terms and conditions set forth in the Plan.

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