Their spin on this compensation change is that they are reducing the heavy bonus incentives so that bankers do not make poor, short term decisions in order to boost the much-loved bonus but this still misses the point. Across the board this industry continues to pay too much. The numbers are well above other industries and for what? Have we missed their brilliance? Is it hiding under a rock or is that where they left their ethics? Trimming the reliance on fat bonuses is great but increasing salaries? Sorry but moving sideways is not the answer. If anything, Wall Street compensation should be less than other industries until they figure out a way to provide profits instead of losses.
Marketwatch:
Morgan Stanley plans to raise the base salaries of its top executives to reduce its emphasis on bonuses and create a pay program balanced among fixed, short-term and long-term compensation, the bank said in a Securities and Exchange Commission filing.
The move reflects acknowledgment by Morgan Stanley and other Wall Street firms that their compensation structure was a factor in creating the financial crisis, The Wall Street Journal reported. The potential for big bonuses at a given year's end led traders and other employees to make riskier bets to maximize short-term profits.
