If you are a banker at Morgan Stanley, you probably didn’t want to pick up yesterday’s paper. Not only is your total compensation likely to drop for 2012, an activist investor is openly questioning whether you’re already overpaid.
Analysts’ forecasts suggest that Morgan Stanley has set aside roughly $15.8 billion for employee compensation and benefits for 2012, down roughly 4% from last year, according to The Wall Street Journal. Average compensation per employee is actually expected to rise, due to a smaller workforce, but that increase can be attributed to Morgan’s brokerage business, which is thriving. Average comp for investment bankers and traders is expected to fall. Oh, and 100% of bonuses will be deferred for top bankers.
Meanwhile, activist investor Daniel Loeb, who runs hedge-fund firm Third Point, a firm known to make waves after taking a position, has criticized Morgan Stanley’s pay structure, particularly for directors, as the firm is a “substantially smaller and simpler bank” than rivals, according to a letter obtained by the Journal.
Loeb has a history of using his leverage as an investor to drive major changes. He helped push former Yahoo chief executive Scott Thompson out after just four months, and created three new seats on Yahoo’s board for his confidants, after winning a bitter proxy fight.
And the final pill to swallow for Morgan bankers? Analysts expect rivals at Goldman to see their take-home pay increase by more than 10% for 2012.
Location, Location, Location (WSJ)
Before the financial crisis, hedge funds run by smart people with strong connections could launch anywhere in the U.S. and find success. Now you better call Manhattan home or you’ll likely struggle.
How Banking Can Ruin Your Body and Mind (eFinancialCareers)
Most people in banking are type-A personalities, very driven and very ambitious and they don’t know what healthy limits are.
No Tax Break (Bloomberg)
Goldman Sachs will not hold off issuing bonuses to U.K. bankers in an effort to minimize their tax burden. The bank considered delaying delivering bonuses until after April, when top income tax rates drop, but decided against the plan.
Blowing Smoke (BBW)
Roughly 30% of hiring managers report finding false or misleading references on applicants’ resumes. And eight out of 10 managers do reference checks. You do the math.
Nothing Standard (Financial News)
Middle Eastern debt bankers had a banner year in 2012, with debt volumes and banker fees up 26% from a year earlier. Standard Chartered, which always seems to be hiring, overtook Deutsche Bank as the top earner.
Bulls Are Back, Baby (Financial Times)
Appetite for risk has peaked, according to a new survey, with nearly half of all fund managers favoring riskier equities over government bonds and other fixed income products.
Daddies Need More Money (BBW)
Employee compensation drops slightly soon after a male chief executive has his first child, according to a new study. CEOs, meanwhile, see their own compensation rise by nearly 5% following the birth of their first child.
Buzz Around the Office
The Genius of Admitting You’re Not One (Business Insider)
Here’s the end result of a being completely honest in a cover letter. It’s brazen and unusual, and has all of Wall Street fighting for the applicant’s services.
List of the Day: Internships
Having an internship on your resume is a huge benefit to recent college graduates, particularly those looking to get into finance. Here’s how to get one.
- Create a resume and cover letter template, but tweak each one to fit the job.
- Create a spreadsheet with the details of each application.
- Visit your college career center.
(Source: AOL Jobs)