Skip to main content

Bonus Watch '11: Morgan Stanley Hops On The Tantric Bonus Bandwagon

  • Author:
  • Updated:

Morgan Stanley is scheduled to hear about bonuses tomorrow. Ahead of the numbers, management has been telling employees to manage their expectations, 'cause they're not getting much. To that end, today the bank has announced that when people do get an exact figure, to take that number and then think about what forty percent of it is-- that's how much you're actually getting now.

Morgan Stanley has sought to pre-empt new rules capping cash pay-outs on Wall Street, deferring 60 per cent of employees’ 2010 bonuses. The announcement came as the bank reported a higher-than-expected 88 per cent jump in fourth-quarter profits in spite of a fall in fixed income trading revenues.

Morgan Stanley did not disclose the precise form 2010’s deferred pay-outs would take. In 2009, the bank gave out restricted options that vest after three years and cash that is held by Morgan Stanley for a similar period and is subject to “clawbacks” if the employee underperforms.

So, this sounds bad, but before anyone gets preemptively upset, let's look on the bright side-- those at MS will most likely still be getting their money sooner than Credit Suisse, whose employees have been told to sit tight 'til 2014.

Morgan Stanley Defers Bonuses [FT]


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

Bonus Watch '16: Morgan Stanley Has Some "Furious" Junior Bankers On Its Hands

While associates on up are said to be going into the weekend feeling good about life.