According to Foxbusiness Morgan Stanley's announcement last week that it will reduce 2011 bonuses to its executives and place a "cap" on the cash portion of the annual payouts came after protracted discussions with securities regulators who expressed concerns over the high amount of the firm's revenue that is dedicated to compensation, the FOX Business Network has learned.
While Morgan Stanley officials cited the existence of its large brokerage sales force for skewing the numbers (brokers retain a large percentage of the revenue they produce as compensation) regulatory officials remained concerned about the firm's compensation costs since Bank of America, which controls the Merrill Lynch brokerage sales force, has a far lower compensation ratio. Morgan chief executive James Gorman had to "baby walk" regulators through the compensation process, and point out that in addition to brokers, Bank of America also employs low-wage tellers and other staff in their branch offices, which depresses its overall ratio, a senior exec inside Morgan Stanley told FOX Business….
Read more: http://www.foxbusiness.com/2012/01/23/securities-regulators-made-push-for-morgan-stanley-to-limit-cash-bonuses/
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