New York: Investment bank Morgan Stanley is deferring more of its employees' compensation as part of an industrywide move to encourage staff to consider the long-term health of their firms in making business decisions.
In 2010, Morgan Stanley deferred an average of 60 per cent of employees' pay, up from 40 per cent in 2009.
For the most senior employees — members of its operating committee — the average amount deferred was more than 80 per cent, up from 75 per cent in 2009, the bank said in its earnings report on Thursday.
Banks are changing the way they pay staff, in part to get ahead of regulators and other rule makers.
Politicians, activists and others have accused banks of socialising their losses and privatising their gains, after governments globally provided trillions of dollars of support to banks during the financial crisis.
The European Union in December set guidelines that 40 per cent to 60 per cent of banks' bonuses be deferred over three to five years.
The US Federal Reserve, among other regulators, is also looking at banker pay.
Banks are changing their pay practices in part because self-regulation can be less onerous than external regulation. They are also hoping to better align employees' interests with shareholders' by, for example, discouraging excessive risk-taking.
Morgan Stanley awarded employees $16 billion (Dh58.76 billion) of compensation for 2010, up from $14.4 billion in 2009.
