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Bonus Watch '10: Morgan Stanley Has Good News And Less Good News

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The good news-- as James Gorman promised, you get to keep your jobs! The bad news-- you're quite possibly getting nada at bonus time. Nada not as in "shitty compared to Goldman," nada as in zilch, zero dollars.

While Morgan Stanley is sticking to Gorman's promise not to make any redundancies, it appears the axe may be hovering not above jobs but bonuses, specifically those of new recruits who have failed to deliver.

If you're wondering if Morgan Stanley is trying to send a message by not paying you, or if you're just being paranoid, the answer is yes, they're sending a message and hoping you'll take the hint.

“There’s a lot of disappointment at Morgan Stanley with some of the hires that were made,” alleged the headhunter. “Some people are going to get zero bonuses in the hope that they clear out and make way for upgrading in 2011.” (Fact: Zero bonuses are often nicknamed 'doughnuts").

“Morgan Stanley’s still underweight in a lot of areas,” said another fixed income headhunter. “But there will be clear signs this year to the people there who are not up to par. You’re going to see a lot of zeros.”

Will Employees At Morgan Stanley Receive Zero Bonuses


Layoffs/Bonus Watch '12/13: Morgan Stanley

Back in January, Morgan Stanley CEO James Gorman sent a simple messages to his employees, who had been grumbling about their pay: STFU or GTFO. "You're naive, read the newspaper, No.1," Gorman told Bloomberg he would say to any members of his staff that wanted to give him lip about their compensation to his face. "No. 2, if you put your compensation in a one-year context to define your over all level of happiness, you have a problem which is much bigger than this job. And No. 3, if you're really unhappy, just leave." Today, in an interview with the FT, Gorman reiterated his stance and added that in addition to reducing compensation for current employees, the bank will likely be drastically cutting pay for future analysts. If anyone has a problem with that, consider applying for a gig at Bank of Mythical Pre-Crisis Era Bonuses. Alternatively, Gorman is happy to discuss a compensation plan in which you'll be awarded shares of his foot in your ass, which vest immediately. In the latest sign of the pressure Wall Street is under to cut costs and address high pay levels, James Gorman, chief executive, said that staff and remuneration would have to be sacrificed as banks cope with lower profits. “There’s way too much capacity and compensation is way too high,” Mr Gorman said in an interview with the Financial Times. “As a shareholder I’m sort of sympathetic to the shareholder view that the industry is still overpaid.” Morgan Stanley itself is already axing 4,000 jobs, 7 per cent of its workforce, by the end of this year. In the new year, Mr Gorman said, the bank will consider its next round of cost-cutting, including lower pay and bonuses. News of further pay cuts, including potentially for new entrants at the investment bank, comes just weeks after Goldman Sachs confirmed it was overhauling its well-known entry-level programme for analysts. Goldman was said to have tired of the number of analysts in the programme who left the bank for hedge funds. Mr Gorman said that Morgan Stanley will probably keep its own analyst programme, but pay could be reduced significantly. Morgan Stanley Chief Warns On Wall Street Pay [FT] Earlier: James Gorman To Employees: STFU Or GTFO