Morgan Stanley revealed today that it had set aside 72 per cent of its second-quarter revenue for compensation and benefits. This might just be a new record.
The average compensation for Wall Street firms hovered around 48 per cent his decade, according to Bloomberg. Many thought that compensation on Wall Street might actually diminish thanks to government bailouts. But instead firms have been increasing the share of revenues that they pay themselves.
So what’s behind it. Bloomberg quotes Morgan Stanley’s chief financial officer pointing to “the war for talent.” The only problem is that the casualties in this war seem to be the shareholders.
At 72% of revenues, Bear Stearns compensation looks a lot like looting.
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