Bonus Watch '15: Morgan Stanley To Pay Employees More Actual Real Live Bonuses

Author:: Bess Levin
Updated:: Jan 14, 2019
Original:: Jan 20, 2015

The kind you can use to buy stuff today, rather than the look-but-don't-touch-until-we-tell-you variety the firm was partial to several years back.

James Gorman’s bank is paying its workers more up front as it seeks to bring compensation in line with competitors. Morgan Stanley lowered the portion of bonuses it will defer to 50 percent, down from a peak of 100 percent in 2012. That’s still high relative to rivals, CEO Gorman said during a conference call Tuesday to discuss fourth-quarter results. But, he added, “it continues to tie our employees to the firm.” Last year, the bank set aside more than $5 billion for compensation and benefits, or an average of $91,500 per employee. That’s up from about $71,500 during the last three months of 2013.

Morgan Stanley to pay bankers more up front [NYP]

The bad news: James Gorman's pay fell 30 percent this year. The good news: he's now in a position to show employees how to take these setbacks like a man, rather than grumbling like someone who puts their compensation in a one-year context to define their overall level of happiness.

And backing up the rear for bonus across the pond: Société Générale.

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