Morgan Stanley Caps Bonuses, Defers Compensation

Morgan Stanley (NYSE:MS) will cap immediate cash bonuses at $125,000 this year as the firm curtails pay and defers more compensation for senior executives.

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Members of the firm’s operating committee, led by CEO James Gorman, won’t get any immediate cash, according to an anonymous source. The amount deferred for junior employees won’t exceed 25 percent of their bonuses, while those paid less than $250,000 annually won’t have any cash deferred.

The decision will increase the average amount of pay deferred to about 75 percent. The firm deferred an average of 60 percent in 2010 and 40 percent in 2009. Deferred cash for 2011 will be paid out in two equal installments in December 2012 and December 2013, a change from the previous deferral plan that paid out in thirds over 18 months.

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