Save for turning in a non-trainwreck performance. Sayeth John Mack:
In 2008 and beyond, for all bonus-eligible employees, we are making part of the year-end bonus deferral a cash award subject to a clawback provision that could be triggered if the individual engages in conduct detrimental to the Firm. The clawback could be triggered if an individual, for example, caused the need for a restatement of results, a significant financial loss or other reputational harm to the Firm or one of its businesses. So, year-end compensation this year will generally consist of three components for eligible employees: a regular cash component, an equity component with the standard three-year vesting requirements, and a deferred cash component that also vests over a three-year period, during which time it will have the clawback provision. During this three-year deferment period, employees will have the choice of a variety of investment options earning competitive returns for the deferred cash. The Firm will not be granting any stock options as part of year-end compensation in 2008.
Morgan Stanley Bonus Program Changed [Dealbook]
MS will claw back your severance. oh no, you got none…
I wonder if they set apart actual cash or if they’ll have to fund the ‘deferred bonus’ down the road…If its the latter maybe you can forget about it…
I wonder if they set apart actual cash or if they’ll have to fund the ‘deferred bonus’ down the road…If its the latter maybe you can forget about it…
And some people wondered where Morgan was going to get all those retail deposits for its new commercial bank deposit base. Oops! No FDIC guarantee on your deferred bonus …
They clearly haven’t thought this through. After the firm blows up how is it going to “claw back” said bonus. Anyway equity is the only claw back you need just ask Joe Gregory, that claw back was a bitch.
@5 More important, how do you get your “clawback-able” bonus??? They defer it for 3 years.
I hope they include this for senior management because their fraudulent risk numbers are going to cause huge reputational risk, and many of the senior management were aware of it and in on it!!!!
my bad, saw claw above, assumed bonus claw back. Still think equity is the answer.
The lesson is not to lie. I learned that from a smart movie.
all these new bs schemes are just there to please the public. comp will go back to normal once the markets turn.
people tend to forget quickly.
all these new bs schemes are just there to please the public. comp will go back to normal once the markets turn.
people tend to forget quickly.
sounds like it’s deferred cash bonus. you get it later if all goes well. you don’t if you screw up.
at least you will have investment options for the deferred part. that way, if your investments go south you can go ahead and screw things up (you’ll have nothing to lose).
once again the pendulum has swung too far left. I wonder how this plays out in the acct. dept. if they end up firing some guy for an illicit email or posting on DB, will it be added back to earnings – thus a perverse incentive (when the qtrly numbs look bad) for wideclops to watch emails closely as she puts together her “naughty” list…
Is quitting considered “deterimental to the firm”?
12 Huh? The impact of the bonus clawback is significant. Unlike looking for illicit emails, where there would have to be tons to move the needle on earnings.
@14 – the wording of this leaves too much room for interpretation by the exec suite to get rid of employees and not pay them for services rendered.
“to a clawback provision that could be triggered if the individual engages in conduct detrimental to the Firm”
if you forward a politically incorrect email from your office account, that could be construed as “detrimental to the Firm”…you don’t need “tons to move that needle”.
nonsense
when you get a rival gurantee job offer, this will all turn to cash….
Moves every 2-3yrs will be norm…
Nice try
@16 – I thought moves every 2 – 3 yrs WAS the norm…it’s the suckers that stick around too long that get the shaft.
get a gurantee = bonus laundering -minus claw
This basically means if you get fired over the next year, you lose most of this year’s bonus, since you won’t be vested in any of the deferred cash or stock. It allows them to overstate bonuses this year with large amounts of deferred stock and cash that they have no intention of actually ever making good on for thousands of employees. This company is becoming such a shit hole.
game over.
thank you for playing.
@19 It has been a shithole for the past 10 years or longer……nothing new here. Bad Karma will see the senior management in Orange Jump Suits a la OJ!
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