Morgan Stanley offers $3 billion broker bonuses
By Jonathan Stempel
Brokers at Morgan Stanley and Citigroup’s Smith Barney unit who produce at least $1.75 million of revenue may be eligible for a payment equal to 105 percent of their annual production, according to a person familiar with the plan. [What? For every dollar they bring in – they will receive $1.05 or a 5% loss on each transaction – I can hear it now – we lose a little on every deal but make it up with volume …. may I ask a question – with this type of compensation structure, where does the money to repay the American Taxpayer come from?]
About 6,500 of the combined entity’s 20,000 brokers are expected to be eligible for the retention package, with the first payment in January 2010 and the second in 2012, the person said. Overall retention bonuses could total $2 billion to $3 billion, the person said.
Citigroup and Morgan Stanley initially received $55 billion of capital infusions from the government’s Troubled Asset Relief Program. [ Of course, no Troubled Assets changed hands – The Government has yet to actually buy any “Troubled Assets” – Taxpayers can expect that move sometime in the not so distance future].