Beginning next year, the Wall Street firm will defer future bonus pools at an average rate of 50%, down from 80% last year, according to Bloomberg News
. The bank will also take a fourth-quarter charge up to $1.2 billion to cover the cost of speeding up the vetting period for certain cash deferrals.
The moves mark a reversal from Morgan Stanley’s efforts to defer more pay since the 2008 financial crisis to tie bankers to the firm and reduce immediate costs, peaking when it deferred 100% of 2012 bonuses for many senior bankers, according to Bloomberg
“Now that our business strategy is in place and the firm’s performance has stabilized, it is time to bring our deferral policy to an appropriate long-term level, in line with the rest of the industry,” CEO James Gorman wrote in a memo to employees.
Morgan Stanley has decided to give its bankers a greater portion of their bonuses up front after years of deferring.