Morgan Stanley to defer high-earners' bonuses: sources
Banks globally are rethinking compensation as trading volumes sag, tighter regulations cut into profit, and revenues grow slowly, if at all. Barclays and Deutsche Bank are cutting 2012 bonuses for investment bankers by up to 20 percent.
Morgan Stanley is deferring bonuses for all employees who make more than $350,000 annually and whose bonuses are at least $50,000, one of the sources said. The source said the deferral does not apply to retail brokers.
The long deferral in cash payouts for high earners is unusual, but more banks will likely follow suit, said Joe Sorrentino, managing director of Steven Hall & Partners, a New York-based executive compensation firm.
"Many investors should be pleased by this, but employees might not be." Sorrentino said.
Deferring compensation can ensure that bankers and traders do not receive high pay for transactions that generate near-term profits and longer-term headaches. Morgan Stanley Chief Executive James Gorman said in June that the bank wants to reward employees in a way that helps bank shareholders.
Investors have been pressing Morgan Stanley to rethink its compensation practices for years. A Wall Street Journal report on Tuesday said that a hedge fund that invests in Morgan Stanley was focusing on executive pay at the bank.
Details about 2012 bonuses will be communicated to employees on
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