logo
Share SHARE
FONT-SIZE Plus   Neg

Morgan Stanley Plans Reducing Senior Pay 20-30%: Bloomberg

Morgan Stanley (MS: Quote) is reducing pay for senior investment bankers and traders by an average of 20 to 30 percent for 2011, Bloomberg said citing people with knowledge of the decision.

The pay cuts will reportedly affect employees on the executive director level and above.

The investment banking giant's decision is said to be part of it effort to curb mounting compensation costs. Earlier this week, reports said that the company is planning to reduce employee bonuses sharply and to restrict cash payouts to $125,000.

The company also intends to defer payout for 2011 to as far as the end of this year, after a quarter saw weakness in trading and investment banking businesses in general.

On Thursday, Morgan Stanley reported a loss for the fourth quarter, reflecting a $1.7 billion settlement with bond insurer MBIA Inc. to resolve lawsuits related to credit default swaps and a 40 percent drop in investment banking revenues. Investment banking revenues dropped 40 percent to $1.05 billion, while trading revenues grew by 13 percent to $969 million.

Financial services firms in general have suffered in terms of trading and investment banking revenue in the fourth quarter. JP Morgan Chase & Co. (JPM) last week reported a 30 percent fall in investment banking revenue.

Goldman Sachs Group, Inc. (GS) also reported a 56 percent decline in profit for the fourth quarter, reflecting a drop in investment banking revenue due to the weak capital markets and Europe's ongoing debt crisis.

MS closed Thursday's regular trading at $18.28, up 5.36 percent on the NYSE.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Gas explosion in Fresno in California injured 11 people on Friday afternoon. Pacific Gas and Electric Co. (PG&E) said workers who are not affiliated with the company have struck a 12-inch natural gas transmission pipeline and the gas leaked was ignited due to the dig-in. Verizon Communications' FiOS TV service has modified its programming bundles and will now offer new packages so that users can subscribe only for channels they prefer to watch. Instagram, the photo sharing app owned by Facebook, has updated its community guidelines to disallow nudity and harassment in uploaded photos and pictures, as well as cyber bullying.
comments powered by Disqus
RELATED NEWS
Trade MS now with 
Follow RTT