Bonus Watch/Layoffs Watch '17: Morgan Stanley Culling MDs Like It's Name Is Goldman Sachs

It's bad news/worse news over at the House of Gorman.

Author:: Thornton McEnery
Updated:: Jul 2, 2019
Original:: Jan 12, 2017

Apparently Jim Gorman's equity traders are getting off easy.

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Morgan Stanley laid off a number of senior investment bankers last week and cut bonuses by roughly 15 percent because of a decline in revenue from dealmaking and capital raising across Wall Street, people with knowledge of the matter told Reuters.

That's ruff stuff. But the whole thing smacks of the Lloyd Blankfein School of Youthing Up Your Corner Offices.

Morgan Stanley, which ranked fourth for investment banking fees last year, cut more than 20 managing directors from its investment banking division globally, representing about 5 percent of the total, the sources said.
While the bank typically lets go of the bottom 5 percent of its workforce at year-end to get rid of underperformers, the cuts to senior bankers were deeper than in years past, according to the sources.
Morgan Stanley also announced the promotion of managing directors on Thursday.

So at the House of Gorman it's "Out with the old" and "In with the soon to be old."

Now go forth, newly-minted MS MDs, and find some shitty tech startups to take public or an almost useless media conglomerate looking to sell whatever valuable assets it can dredge up. Your job depends on it!

Exclusive: Morgan Stanley cuts bankers, bonuses as deals, IPOs stall - sources [Reuters]

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Off to a great start, 2017!

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

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Jimmy Gorman's boys are ready to call this a bear market.

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Morgan Stanley doesn't get France and the strongest case yet for just letting Brexit happen.

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

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Deutsche Bank's mismanagement of this year's bonus season is like a new form of performance art.

James Gorman is approaching cost-cutting with the same focus as the Zodiac killer, so maybe. Morgan Stanley is "maniacally focused" on cutting costs apart from compensation and is on track to reduce expenses by $500 million this year, Chief Executive James Gorman said on Tuesday. Gorman, speaking at a conference in New York, also reiterated Morgan Stanley's plans to reduce costs by $1.4 billion annually over the long term...The bank is also monitoring the size of its overall payroll for possible job cuts as revenue remains under pressure from a weak market environment, he said. "We are very, very focused on that, obviously, in this environment," said Gorman. Morgan Stanley "maniacally" focused on cost cuts-CEO [Reuters] Very much related: Morgan Stanley Joins Goldman Sachs In Herbicide