Bonus vibe good at Goldman Sachs, bad at Morgan Stanley
"This is bonus week on Wall Street, and it's shaping up to be a tale of two firms," according to DealBook.
The two firms in question are Goldman Sachs and Morgan Stanley, two giants of the investment banking industry. At Goldman Sachs, top executives are slated to learn what their 2012 bonus will be on Wednesday, while the rest will get the news on Thursday. The vibe is positive, if not downright giddy after the good earnings report.
Over at Morgan Stanley, however, the mood is more sullen, as employees prepare for bad news on "Communication Day," which is Thursday.
It seems Morgan Stanley has been prepping employees for bad news. The layoffs, which hit home in many areas this week, certainly set the tone. At the same time, Morgan Stanley CEO James Gorman has been adamant about his view that bankers are overpaid. The company is also letting it be known that it will defer 100 percent of 2012 compensation for the highest paid bankers, an extraordinary move.
The deferral applies to employees who make more than $350,000 annually and whose bonuses are at least $50,000; financial advisors are not included. The deferred bonuses will be paid out over three years, notes Reuters.
The compensation will be half equity and half cash. There's a good decent chance that this will pay off for many, as the stock may rise. But cash is king when it comes to compensation, and you have to wonder if this raises issues related to talent acquisition and retention.
- here's the article