Morgan Stanley increases hike bonuses by more than 20% for top performers

Morgan Stanley will increase its annual bonus for top performers by more than 20% on Thursday, people with direct knowledge of the matter said, with a transaction boom to usher in one-off payments by banks this year.

Bankers in the equity underwriting and M&A advisory businesses are set to receive some of the highest raises from the Wall Street firm due to the strong performance of those divisions over the past year, two said. sources.

Investment banks globally adjust their bonus pools based on trading dynamics. Higher bonuses help them retain talent in a fiercely competitive business environment.

Morgan Stanley staff will be notified of their bonus payouts on Thursday, kicking off the busy and highly anticipated annual bonus season, and then receive the money in early February, the two sources said.

Morgan Stanley declined to comment.

The sources could not be named as the information has not yet been made public.

A transaction boom is expected to usher in exceptional payments by banks this year.
Getty Images

Staff in the M&A and Equity Capital Market (ECM) divisions expect bonuses up at least 15% from a year earlier and, in some cases, up 20% or more, two separate sources told Reuters. within these companies.

Other companies whose performance has been less stellar will likely see flat or single-digit increases in their bonus pool, one of the sources said.

The top performers in the M&A advisory and equity divisions will reap the rewards when the bank holds its “communications day” on Thursday, during which staff will be briefed on 2021 bonuses and promotions, the first two sources said.

James Gorman
Higher bonuses are helping big banks like James Gorman-led Morgan Stanley retain talent in a fiercely competitive business environment.
AFP via Getty Images

Bonus payouts at Morgan Stanley, however, are likely to be lower than at Bank of America Corp, which, according to a Bloomberg News report last week, plans to increase the bonus pool for bankers by more than 40%. of investment.

Bank of America’s sales and trading operations could see an increase of more than 30% in bonuses on average, according to the report.

Goldman Sachs, another beneficiary of the record wave of M&A and IPO activity, will notify staff of their 2021 bonuses next Wednesday, according to people familiar with the matter.

A man uses a Bank of America ATM
Bank of America’s sales and trading operations could see an increase of more than 30% in bonuses on average.
Getty Images

Where does Morgan Stanley rank among its peers?

Morgan Stanley’s stock underwriting activity has been one of its highlights over the past year.

The division’s revenue jumped on the back of exceptional stock quotes and as companies took advantage of the increased market liquidity by issuing new shares.

Morgan Stanley ranks third in the global investment banking rankings for fees, having earned $9.1 billion, up 28% in 2021 from a year earlier, according to Refinitiv data.

Stock prices scroll on a ticker near the Goldman Sachs booth on the floor of the New York Stock Exchange
Goldman Sachs will notify staff of its 2021 bonuses next Wednesday, Reuters sources say.
Getty Images

JPMorgan and Goldman Sachs lead the rankings, according to the data.

M&A advisory revenue benefited from global M&A activity which broke all-time highs in 2021.

Morgan Stanley tops the Asia-Pacific M&A ranking for announced deals and was No. 3 globally, according to Refinitiv data.

In Asia-Pacific, including Japan, the bank was third in the ECM rankings, behind CITIC and Goldman, the data showed.