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Bonus Watch '17: Damn Europe, You Crazy Edition

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

As Americans wash the boozy meats sweats from our gross bodies, the sounds of firecrackers and off-balance nationalist pride still ringing in our ears, let us turn our attentions for a moment across The Atlantic, where financial types in Europe are having just a normal week.


And by "normal" we mean "Le cray cray."

Just a quick perusal of bonus news in the Eurozone is enough to make us spit out some cheese with laughter.

From France (via Bloomberg):

A former Morgan Stanley dealmaker in Paris told an employment tribunal that the lender unfairly withheld $1.5 million in deferred pay a year after he raked in more than $100 million in fees while advising Patrick Drahi on a $23 billion acquisition.
Bernard Mourad told judges Monday that the New York-based bank used an incentive plan to deny him a bonus he earned at Morgan Stanley France before he left to work for Drahi in 2015. Lawyers for the bank countered that Mourad knew the compensation scheme was designed to “reward loyalty” tied to continued presence at the firm.

But before you take up arms on the side of Ol' Jim Gorman, we would like to inform you that French law prohibits any kind of incentive scheme tied to staying at your job. Because: France.

And that's not all. It appears that Mourad has some pretty big-time friends in Paris:

Mourad, who left Drahi’s Altice Media Group last year to take a role on Emmanuel Macron’s presidential campaign, is seeking 160,000 euros ($181,000) in damages on top of 1.3 million euros in deferred pay for work he performed between 2012 and 2014 -- the vast majority in shares.

So Morgan Stanley is essentially fighting Gallic culture and law to deny a basically inconsequential bonus to one of Macron's buddies. Mon dieu!

But as frustrated as Monsieur Mourad might be, he can at least take heart that he isn't dealing with English retail billionaire Mike Ashley:

Mike Ashley, the billionaire owner of Sports Direct, said a former employee’s claim that the retail tycoon made a 15 million-pound ($19 million) bonus deal while drinking heavily in a London pub was "nonsense.”
Jeffrey Blue, an ex-Merrill Lynch investment banker who worked for Ashley, is alleging in a London lawsuit that his boss reneged on a pledge made in a bar in early 2013 that he would get the payment if he doubled the retailer’s share price to eight pounds.

Ex-Merrill guys are no stringers to getting screwed, but we have a reflexive inclination to side with Ashley here, what with that bonus arrangement sounding super dumb. Unless there is some serious - and wonderfully colorful - evidence that Ashley gets ripshit drunk and behaves like an alcohol-fueled animal, we are going to side with management on this one...

"I can’t remember the details of the conversations that we had in the pub as it was a heavy night of drinking," said Ashley. "I do recall that there was a lot of banter and bravado, which was a mixture of the drinking and me trying to build a rapport with the brokers."

Rur roh...

Blue’s witness statement, made public Monday, included a plethora of embarrassing allegations for Ashley. One management meeting Blue says he attended in a pub involved Ashley challenging a young analyst on Blue’s team to a drinking game that ended after each man downed about a dozen pints of beer followed by vodka chasers. The analyst quit the contest, and Ashley vomited into the pub fireplace, Blue said.

Now that's what we call a Brexit.

Morgan Stanley Banker Fights for Bonus After $100 Million Year [Bloomberg]
Sports Direct's Ashley Says Drunk Bonus Deal Claim Is 'Nonsense' [Bloomberg]


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


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Bonus Watch '13: Jim Gorman Gives Employees The Option To Either Take Their Bonus In Three Easy Installments

Since taking the reigns at Morgan Stanley in 2010, CEO James Gorman has guided the firm with a managerial style that boils down to telling people, more or less: You'll get it when you've earned it, "it" being anything from personal space to money to his respect. On the point of compensation, last year he told employees complaining about what they were paid to either open a newspaper and get over themselves or do everyone a favor and quit. Today brings news that this year, he's doubling down on that mandate and daring anyone to make something of it.

Wells Fargo.Insane

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