James Gorman Has A Nifty New Euphemism For ‘Pay Cut’

Morgan Stanley decides compensation is only for closers.
Getty Images

Getty Images

It’s called “streamlining” a broker’s share of the fees and commissions he or she collects, all part of “Project Streamline,” which Gorman hopes will save Morgan Stanley $1 billion a year. Now, he’s more than happy to keep your share the same, but you’re going to have to drum up the money yourself.

A broker who generates $220,000 next year, for example, will get paid 28% of that revenue under the 2017 compensation plan, the lowest hurdle. This year, $220,000 in revenue would have netted the same broker a 32% payout. If the broker wants to maintain his 32% payout in 2017, he would need to produce an additional $22,000 in fees and commissions.

Bigger producers will be affected, too. Brokers aiming for 49% to 53% revenue payouts will need to generate at least $3.3 million in fees and commissions next year, up from $3 million in 2016. The grid’s biggest hurdle, 51.5% to 55.5%, which depends on the broker’s length of service, remains unchanged at $5 million.

Morgan Stanley Toughens Some Pay Hurdles for Brokers [WSJ]