When it comes to compensation, U.S. investment banks have been more generous than their overseas rivals in recent years. Still, performances haven’t been consistent quarter-to-quarter, including at Morgan Stanley. As such, compensation numbers seem to be constantly influx.
The firm’s institutional securities group, which houses its trading and investment banking teams, saw a 15% drop in net revenues year-over-year during the first quarter, with double-digit drops in equity capital markets (-19%), debt capital markets (-22%), advisory (-29%) and equity sales and trading (-21%). And that’s coming off a “challenging” fourth quarter, as described by CEO James Gorman, which resulted in a substantially smaller compensation pool in Q4 for investment bankers and traders. Compensation and benefits costs cratered by 24% in the fourth quarter.
However, the last two quarters came on the heels of a banner start to the year for Morgan Stanley investment bankers and traders. The institutional securities group still performed better over the course of the year than it did in 2017, and the compensation pool for all of 2018 increased by 5% year-on-year. So where does that all leave Morgan Stanley when it comes to pay? Compared to the other top 10 investment banks in the U.S., Morgan Stanley salary totals are in the middle of the road or slightly above average, depending on the title, but recent bonuses in the U.S. leave a bit to be desired.
As you can see in the chart below, salaries for analysts and associates are roughly equal to the average of the top ten U.S. banks, according to new research from Wall Street Oasis. However, vice presidents within Morgan Stanley’s investment bank earn an average salary of $266k, well above rival banks at $227k. We didn’t include numbers for managing directors as the sample size was too small, though MD pay in client-facing investment banking roles varies greatly based on hitting revenue targets.
When is comes to bonuses (second chart), analysts and associates at Morgan Stanley earn roughly the same as their colleagues at other U.S. banks, yet VPs take home an average bonus of nearly $40k less. Considering the cuts Morgan Stanley made to the compensation pool during Q4, the disparity makes some sense. At the end of the day, VPs from both camps take home around the same in total compensation due to greater salaries at Morgan Stanley. But if performances and bonuses come back toward the median in the coming quarters, bankers at Morgan Stanley are well-positioned moving deeper into 2019. Salaries are extremely competitive and the ceiling for bonuses remains lofty.
What is the average salary for Morgan Stanley in the U.S.?
The average Morgan Stanley salary in the U.S. is $91k for analysts, $145k for associates and $266k for VPs.
What is the average bonus for Morgan Stanley in the U.S.?
The average bonus for Morgan Stanley in the U.S. is $43k for analysts, $71k for associates and $105k for VPs.
(Note: First and second-year analyst salaries and bonuses were averaged)
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