Employees within fixed income may need to find room at another inn. Read more »
They’re not there yet, however; first, they’re going to send James Gorman a strongly worded letter about the issue and make a decision based on his response. They do sound pretty miffed though, so God help the guy if his answer is anything but “I’ve got my tool kit and I’m on the way over.” Read more »
Morgan Stanley’s roadmap for the future involves fewer humans, more machines. Read more »
There’s been sort of an impromptu referendum on whether the big US universal banks should be smashed into itty-bitty pieces, and how itty-bitty, and which ones should be smashed first, and for some reason the leading contenders seem to be Citi and Morgan Stanley. Those two seem uninterested in that free advice, though, since they’re now haggling over the price of Morgan Stanley Smith Barney, the joint venture that is slowly migrating from Citi’s bloated clutches into Morgan Stanley’s also apparently bloated clutches. Whee.
Morgan Stanley owns 51% of this wealth management venture, while Citi owns 49%, and MS is looking to exercise an option to buy 14% more at a contentiously negotiated price. Citi carries MSSB on its books at a $22bn valuation and wants Morgan Stanley to pay a bit more than that to buy another chunk of it, while Morgan Stanley carries it at something like a $14bn valuation and wants to pay $9bn for it.* I submit to you that that bid/ask spread is not well calculated to make you feel good about (1) the intellectual rigor and independence of Citi’s and/or Morgan Stanley’s investment banking valuation work or (2) the balance sheet transparency of major banks. Thing (1) is I guess why the parties hired Perella Weinberg to be their neutral appraiser.** Thing (2) sparked Citi to put out an 8-K last week saying “oh btw we might have a huge hit to earnings when we mark down our ‘reasonable and supportable’ $22bn valuation to whatever Perella Weinberg finds,” which would not be great for earnings or Basel I capital or general confidence in Citi.***
Especially when he’s working his ass off to make this company big money and no one seems to give a baker’s damn. Here’s a tip from the Mayo Jar: When Fortune All-Star Analysts talk, you listen. Read more »
Jefferies set aside $870 million in the first six months of its fiscal year, enough to pay its 3,809 employees an average of $228,407. Goldman Sachs set aside $225,789 for each of its 32,300 workers. Average pay for the 26,553 people in JPMorgan’s investment bank was $184,989, or at least 18 percent less than Jefferies’s and Goldman Sachs’s reported figures. It was 10 percent less than both in fiscal 2011…Goldman Sachs, run by Chief Executive Officer Lloyd C. Blankfein, 57, includes consultants and temporary staff when reporting headcount. Jefferies, which has been luring talent from larger rivals to expand in the wake of 2008’s credit crisis, tallies only full-time workers in its disclosures. Jefferies’s reported headcount would expand by 10 percent to 15 percent if the firm included temporary workers, said a person with direct knowledge of the figures who requested anonymity because the information isn’t public. While that would place the firm’s average pay per employee below Goldman Sachs’s, it still exceeds JPMorgan’s and Morgan Stanley’s. [Bloomberg]
The House of Gorman will be saying good-bye to a few thousand Little Jims before year-end. Read more »