Morgan Stanley says its bonus pool for staff other than financial advisors declined approximately 50 percent compared with 2007.
The decline reflects "difficult market conditions, stock price performance and our full-year earnings in this challenging environment," Morgan Stanley said when announcing its fourth-quarter and fiscal 2008 results this week.
As previously announced, its chief exeutive and co-presidents won't get a bonus this year. Several other bulge-bracket banks also have said their top leaders won't get bonuses for 2008. The bank also repeated its November announcement of a bonus "clawback" provision that could affect an undisclosed portion of employees, but declined to provide further details.
Overall compensation expense for 2008 dropped 26 percent to $12.3 billion from $16.6 billion in 2007. The company didn't disclose a specific figure for the bonus pool. Average compensation per employee fell to $262,000 from $340,000 last year. But because Wall Street pay structures skew upward, most employees earned less than the average, while a sizable minority earned much more.
For the fourth quarter, the bank reported compensation and benefits expense of $1.6 billion, 50 percent below the year-ago period.
Full-year net income was $1.7 billion, down from $3.2 billion last year. In the fourth quarter Morgan Stanley reported a $2.3 billion net loss, compared with a $3.6 billion net loss a year earlier.
Two other interesting points emerge from the release: Worldwide headcount actually climbed by about 600 (1 percent) during the fourth quarter, even after the bank said Nov. 12 that it would reduce staff by 9 - 10 percent in two of its main business units, institutional securities and asset management. And, the company is changing its fiscal year-end from November to December, starting in 2009.