Morgan Stanley is one financial-services firm in New York to cut its bonuses by 10 to 30 percent in 2010. Salary and recruiting experts say other big Wall Street banks will follow suit but the scale back in compensation should not affect recruiting.
A Morgan Stanley spokesman said to FINS Finance that the company would still be committed to recruiting top talent: "Our long-term success depends on retaining the best people, and we are committed to paying competitively." Compared to last year, where Morgan Stanley paid 62 percent of its revenues as compensation to its employees, it had set aside 12 billion US-Dollar or 50 percent of revenues through the first nine months of this year only. Chief Executive James Gorman has indicated that he wants to lower these numbers even further.
However, salary and recruiting experts have not expressed concern over Morgan Stanley's decision and do not think that it will make the firm less appealing to top talent, given that Morgan Stanley's competitors have also experienced lower revenues and were looking to cutting compensation in 2010. A financial expert said that candidates shouldn't make a decision based on general reports of bonus cuts as top performers may still receive major payouts at the expense of the bottom 25 percent.
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