How do you determine morale for members of NPC parties and other leveled NPC opponents? I can’t imagine an 11th-level pirate king is has a -2 morale.
I don’t know about that. An 11 HD Fire Giant only has a +1. An 8 HD Octopus has a -1. A 1 HD Berserker has +4. A Titanothere has 12 HD and a -1. Pirates aren’t necessarily known for being self-sacrificing.
That said, I suppose you could bump up morale by +1 per level until it reaches +4, as if he were some kind of henchman.
Referencing the morale of mercenaries, we can note that 0-level heavy infantry have ML +0 and 1st level veteran mercenaries have ML +1. A 5th level fighter-type increases ML of his retainers by an additional +1.
So I'd suggest as a rule of thumb that an NPC party of 1st-4th level has ML+1, and if 5th level or above, +2. If one of the NPCs has an appropriate proficiency or class power, you could raise this again.