The News: Pay Changes at Morgan Stanley

Morgan Stanley's new executive-pay plan unveiled Tuesday appears to focus on the bank's top 30 leaders. It could spare traders, bankers and other professionals working in the trenches - or not.

It's hard to tell at this point, since details haven't been finalized or even officially announced. The story first appeared in Tuesday's Wall Street Journal.

Interestingly, clawback is cited as one possible "new" feature. Yet, Morgan Stanley announced a clawback plan with great fanfare one year ago - and a broad-based one at that, covering all bonus-eligible employees.

The emerging program reportedly will place about 75 percent of senior executives' 2009 pay in deferred stock. In contrast, Goldman Sachs recently said its 30-member management committee will receive 100 percent of this year's bonus in the form of deferred stock subject to five-year vesting and clawback.

What about revenue producers who aren't among the senior executive leadership? The WSJ says Morgan Stanley is also "changing pay practices for traders, adjusting compensation for how much risk they take for the firm." Final decisions could come next month.

James Gorman, who takes over as CEO on Jan. 1, faces pressure from shareholders and public officials to reduce Morgan's company-wide compensation and benefits expense, from a relatively high 64 percent of revenue. At the same time, however, Gorman is pushing to rebuild trading business - which necessitates competitive pay and bonuses.

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