Morgan Stanley to Trim 2010 Bonus Pool by 10% to 25%
Dozens of managing directors have been informed of the bonus estimates, which might still change in the coming weeks, the source told the Journal. The cuts are slated to affect traders, back-office staff and other major employee groups, but perhaps not unusually strong performers. Also, top executives might be "pressed" to take reduced bonuses this year.
If the bank experiences a surge in revenue in the last few weeks of December, or gets a boost from plans to sell a stake in China International Capital, the bonus reductions might be smaller than currently expected, the paper further reported.
But it's not just about his own bank's profits. Gorman has been vocal about taming pay overall on Wall Street. The Journal quotes him from a speech in November, saying that there is an imbalance when "pretty average employees [are] making four, five, ten times what somebody in any other industry would be making, it doesn't quite work right." Gorman also suggested it was time to change the pay model of "heads-I-win, tails-somebody-else-loses" system that he said has been pervasive at banks and securities firms.