Traders' post-bonus gripes seem worst at Morgan Stanley
Establishing how happy bonus recipients in banks are with their awards is a necessarily imprecise science. Banks don't comment on their payouts and individuals are typically tight-lipped. However, one class of person is immersed in the flow of information surrounding bonus woes and can be relied upon for an opinion - headhunters. And this year, headhunters say the currents around Morgan Stanley seem particularly choppy, for macro traders at least.
"JPMorgan were good, Goldman Sachs were good, Citi were good, Bank of America were good and it seems so far that Morgan Stanley paid worse than the rest," says one of London's top rates headhunters. "Goldman seem to have wangled it so that FX traders were only 10% down," declares another of the City's top FX headhunters. "But Morgan Stanley were generally bad, although they seem to have paid better in trading than sales." Another macro headhunter affirms the vibe: "It would be reasonable to say that rates bonuses weren't bad at Goldman Sachs or JPMorgan, but were much worse at Morgan Stanley."
Morgan Stanley declined to comment for this article, and it's entirely conceivable that the headhunters we spoke to had encountered the same cluster of disaffected underperformers in the macro business. In credit trading, one US headhunter said Morgan Stanley paid well and that it's at Bank of America where bonus grumbles are most intense this year.
The alleged whinging among Morgan Stanley macro traders follows a report suggesting that in investment banking, at least, total compensation this year is on a par with US rivals and higher than Citi at MD level. However, one London headhunter also told us that Morgan Stanley's MD bonuses for investment bankers in London were worse than anticipated: "At Morgan Stanley it was worse than anticipated - good MDs were down 30% and a lot of people were down 40%."
Morgan Stanley cut compensation spending in its investment bank by 10% last year, which seemed generous in light of the 41% decline in the division's net income. The bank said stronger results in "macro, credit products and commodities" drove a 20% increase in its 2022 fixed income trading revenues. This was better than the 10% increase achieved at JPMorgan, but lower than the 44% increase registered at Goldman Sachs.
Morgan Stanley has reason to keep its macro traders happy. In the past few years they have shown a proclivity for leaving for Deutsche Bank, which is due to announce its own bonuses early next month.
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