Wednesday, January 20, 2010

Morgan Stanley Allots 62% of Revenue to Employee Pay, Higher in Decade

" Jan. 20 (Bloomberg) -- Morgan Stanley, the world’s biggest brokerage, allocated 62 percent of revenue to pay employees in 2009, the highest ratio in more than a decade, as the firm added staff faster than it made money.

The compensation and benefits expense rose 31 percent to $14.4 billion as revenue climbed 28 percent, the New York-based company said today. Because Morgan Stanley added more than 15,000 employees in June through its Morgan Stanley Smith Barney wealth-management joint venture, average compensation per employee fell to $235,193 from $244,000 last year.

Wall Street firms including Morgan Stanley are under pressure from politicians and regulators to curb year-end bonuses after taxpayer funds helped the companies rebound from the financial crisis. At the same time, Morgan Stanley’s efforts to keep brokers at Smith Barney and hire 400 people for sales and trading added to compensation costs. The bank posted fourth- quarter earnings from continuing operations of $413 million today, missing analysts’ estimates on lower trading revenue."

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