Morgan Stanley Is Boosting Bonus Pool for Bankers, Traders

(Bloomberg) -- Morgan Stanley is planning to increase bonuses for dealmakers and traders, businesses that are on pace for a bigger revenue jump than at the firm’s rivals, according to a person familiar with the matter.

Percentage increases for Morgan Stanley’s institutional-securities group will be in the low-to-mid single digits, said the person, who asked not to be identified discussing pay matters. The decision isn’t final and will still have to take into account the division’s performance in the last few weeks of the fourth quarter, the person said.

Morgan Stanley’s plans represent a brighter outlook for pay than what’s expected more broadly across Wall Street. Recruiting firm Options Group predicted in a report last month that equity traders would get a slight bump in compensation, while bonuses for fixed-income traders drop. Investment bankers were expected to see little change, according to the report.

Revenue from investment banking and trading rose at most firms in the first nine months of the year, with Morgan Stanley’s 17 percent jump topping most competitors. The fourth quarter has been more challenging, as banks grappled with violent market swings, trade tensions and a flatter yield curve. Morgan Stanley will give its final compensation expense figures when it reports fourth-quarter results next month.

Chief Executive Officer James Gorman is seeking to expand the firm’s lead in equities trading while boosting electronic capabilities at the fixed-income business. Earlier this year, he promoted trading chief Ted Pick to lead the entire institutional-securities division.

The bank told its junior bankers this year that it would increase their pay and offer quicker promotions.

©2018 Bloomberg L.P.