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Morgan Stanley posts loss, sets aside 72% of net revenue for bonuses!

It was bad enough when Goldman Sachs decided to pay out huge bonuses to its top employees, when it wasn’t so long ago that we were bailing them out. But banks are generally now doing well. The exception to this is Morgan Stanley, who just announced their third quarterly loss, and even admitted that it was disappointed with key departments. So what do they do? Morgan Stanley announces that they are allocating $3.9 billion for bonuses. That is a stunning 72% of net revenues.

I thought the purpose of a bonus was to reward key employees when they did well. But in the topsy-turvy world of US banks, you get rewarded handsomely even when you do poorly. When the economy falls apart (and it is partly your fault), you still get your huge bonus. When other banks are doing well, but you aren’t, you still get your bonus, even though it is almost certainly your fault the bank is not doing well. Just what do you have to do to not get a bonus?


One Comment

  1. starluna wrote:

    Just what do you have to do to not get a bonus?

    Develop leukemia. Then you get fired. At least according to some people.

    Thursday, July 23, 2009 at 8:51 pm | Permalink