Morning Coffee: Morgan Stanley Picking on I-Bankers
Morgan Stanley Chief Executive James Gorman has put his money where his mouth is. To be more accurate, Gorman, who has said publicly bankers are overpaid, has taken that money away, at least from Morgan Stanley’s investment bankers.
While the average compensation per employee has risen, from $201,542 in the first nine months of 2011 to $207,757 in the same period this year, the comp pool for investment bankers shrank by 9%, according to Bloomberg. The pool for the institutional-securities unit increased 8% from a year earlier.
The ratio of compensation to revenue for Morgan Stanley’s i-banking unit dropped to 44.9%, down from 48.4% in the first nine months of last year. That said, investment banking units at firms like Goldman Sachs and J.P. Morgan still boast lower comp-to-revenue ratios.
The news falls on the same day that Morgan Stanley reported better-than-expected adjusted earnings for the third quarter, backed primarily by moderate fixed income growth. Before adjustments, and including a one-time credit charge related to the value of its debt, Morgan Stanley posted a loss of $1.01 billion, or 55 cents a share.
Jobless claims increased last week to a seasonally adjusted 388,000, well above most forecasts.
Management Changes (Bloomberg)
Oliver Haslam and Casper Lund, two members of London-based Edoma Partners’ senior investment team, are set to leave the firm in the imminent future. Edoma has seen its assets tumble in recent months as the fund continues to decline.
Turning Over (FIN Alternatives)
Anthony Chiasson, the co-founder of Level Global Investors set to face trial later this month on insider trading charges, has offered up an excuse of sorts for his behavior. Chiasson’s fellow co-founder, David Ganek, made the same illegal trades, according to Chiasson’s lawyers. Ganek has not been charged with any crimes.
Hedging Bets (Financial Times)
Goldman Sachs advised clients to “bet on the opposite outcome of what the firm believed would happen” so that it could cash in on the other side of the trade, says former Goldman employee Greg Smith in his tell-all book.
Out on an Island (Business Insider)
Part of the reason that investment bankers work so hard, in addition to unpredictable, demanding clients, is the difficulty of dividing a particular project among several associates. Individual tasks demand a much higher level of accountability, goes the thinking.
Geneva Banks Trimming Jobs (Bloomberg)
Geneva banks employed 500 fewer people in June than they did a year previous. Many of the job cuts were related to redundancies created by a string of recent acquisitions.
Greg Coffey, the star trader who famously turned down a $250 million retention offer to join Moore Capital, is hanging them up at the ripe old age of 41. Assets in Coffey’s hallmark fund stood at $450 million in September, down from $1.6 billion in 2010.
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Buzz Around the Office |
Can I Just Call Her Rosa? (The Sun)
Uma Thurman, an actress known affectionately by just three letters, apparently has no interest in passing down the tradition to her daughter. The three-month-old baby girl has been christened Rosalind Arusha Arkadina Altalune Florence Thurman-Busson.
List of the Day: Moving Up
Getting ahead in your career requires an open mind and the willingness to go the extra mile.
- Keep up with industry news to learn tomorrow’s skills.
- Treat yourself as a consultant, working to add unique value to your company.
- Be open to new opportunities.
