21st
Jan
2010

Morgan Stanley Increases Compensation

Posted by admin

Morgan Stanley released information regarding their employee compensation over the past year and the news is going to be a negative publicity storm. The company authorized billions more in compensation for employees over the past year, a 30% increase over the previous year, in fact. To be fair, though, the compensation is less per employee¬† because of an expanded payroll–thanks to a joint venture with Citigroup.

Morgan Stanley’s compensation pool represents 62 percent of its revenue, the highest in at least a decade. Typically, Wall Street firms have used about 50 percent of revenue to pay employees. On Wednesday, the company said it lost $907 million for all of 2009, compared with a loss of $731 million a year earlier.

Colm Kelleher, a Morgan Stanley executive who was chief financial officer during 2009, said in an interview that the compensation ratio was higher in part because of a brokerage joint venture it introduced this year with Citigroup. “While I do believe compensation for the industry is inflated, there’s a competitive pressure,” he added.

If you want to see the compensation figures for Bank of America–they can be found at the same link.