Great big bonus deferrals at Morgan Stanley show EU bankers aren't the only ones having to wait

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Tears have been shed over the lot of European bankers. Where else in the world are people obliged to have at least 40% of their bonuses deferred and only half the remainder paid out in immediately available cash?

Admittedly the cash bonus restriction hasn't caught on outside the EU, but deferrals are widespread everywhere.

Yesterday, Morgan Stanley said it's deferring 60% of its entire bonus pool, globally, and 80% of the bonus pool for the most senior staff on its operating committee. Last year, the comparable figures for deferrals were 40% and 75%.

Equally, when Credit Suisse announced its new pay plan last week (35% deferrals above 33k, but 70% for MDs), it stressed that it applied globally.

There were no get out clauses for bankers based outside the EU.

This should be welcomed in the City, where there's a perception that everyone's a bit hard done by. Last weekend, the Financial Times cast an envious eye on Asia, which it said was, "immune to the whole drive to curb pay," adding that Asian financial centres see paying "untrammelled market rates" as a source of competitive advantage.

That may be so, but Morgan Stanley's figures show that bankers - wherever they're based - can't expect to receive untrammelled market rates in the form of a non-deferred bonus at the end of each year. Everyone has to wait - even in Hong Kong.

Much smaller bonuses at Morgan Stanley?

Separately, eyebrows have been raised about the likely size of investment banking bonuses this year at Morgan Stanley.

The company doesn't break out pay and headcount at its investment bank, making it impossible to ascertain how much has been set aside for its investment bankers vs. its retail brokers.

However, compensation as a percentage of revenue declined from 62% in 2009 to 51% last year. As the Wall Street Journal points out, this was despite a bigger percentage of the total compensation pool going to brokers who are paid a percentage of the revenues they bring in.

Someone, therefore, has obviously been squeezed, hard. Fixed income traders are the likely victims. The compensation pool at the investment bank is down 20%.

Nor can Morgan Stanley bankers take solace in the fact that they're being paid in stock. As the Financial Times notes, the banking index has more than doubled since the price nadir of 2008; Morgan Stanley's stock has risen 20%.

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