NEW YORK (Reuters) - Morgan Stanley MS.N said on Friday that Chairman and Chief Executive John Mack received $1.6 million in salary and other compensation last year, a big cut in pay for a disappointing performance marked by massive mortgage trading losses.

Including nearly $16.5 million in gains from the exercise last year of previously granted option and stock grants, Mack’s total compensation was about $18 million last year.

According to the annual proxy, Mack received an $800,000 salary, but no annual bonus or stock awards for a year when the bank suffered $9.4 billion in losses from mortgage trading and other assets. Profit fell 57 percent and the bank was prompted to sell a $5 billion stake to China.

Morgan Stanley first disclosed that Mack would not receive a bonus for 2007 in December, which it said was at his request.

Mack also received $399,153 in other compensation, including his use of company aircraft, expenses from repositioning aircraft, use of a company car and meals.

The value of Mack’s pension and deferred compensation plans, meanwhile, increased by $391,844 last year.

The proxy shows that Mack received stock awards valued at $36.2 million and options valued at $4.02 million, in December 2006, which is the first month of fiscal 2007. These awards plus the annual salary and “other” compensation brings Mack’s total compensation received in fiscal 2007 to $41.4 million.

The stock awards and option grants, worth a combined $40.2 million, were awarded for his 2006 performance, a strong year for the world’s second-largest securities firm.

Morgan Stanley reported in December that profit for its fiscal year ending November 30 fell to $3.21 billion from $7.47 billion a year earlier, hurt by losses tied to subprime mortgages and other debt.

Last year, Mack realized $8.02 million in gains from exercising 207,331 options and $8.43 million from realizing restricted stock awards.

As of November 30, Mack also held exercisable options for 941,803 shares, unexercisable options on 210,252 shares and restricted stock units worth $59.7 million at the end of November.