(bloomberg) Morgan Stanley Chief Executive Officer James Gorman said the U.S. bank is paying staff “competitively” after managers turned the business around over the past five years.
“We have a tremendous management team,” said Gorman, 56. “I think they’ve been killing themselves for five years turning this thing around and it’s worked. And, God bless them, they deserve all that comes from that success.”
Morgan Stanley reported last month that its third-quarter earnings almost doubled to $1.69 billion, beating analysts’ estimates, on higher revenue from trading stocks and bonds. The company’s revenue from equities trading beat Goldman Sachs Group Inc.’s for a third straight quarter and by the widest margin in at least three years.
Gorman is in Singapore to attend the annual Asia-Pacific summit hosted by Morgan Stanley (MS) in the island nation.
In the first nine months of 2014, Morgan Stanley’s investment-banking unit posted the biggest jump in revenue among its four largest U.S.-based Wall Street rivals, a good sign for employees seeking higher bonuses. Gorman has tried to boost returns from fixed-income trading even while reducing staff and capital alloted to the unit.
The chief executive’s comments today contrast with January 2012, when he said that employees of the New York-based bank would be “naive” if they didn’t understand the need for pay cuts in an industry reshaped after the global financial crisis. At the same time, once the bank started to perform again, “compensation will reflect that,” he said then.
Morgan Stanley, the owner of the world’s biggest brokerage, set aside $12.7 billion in the first nine months for compensation expenses, 4 percent more than a year earlier. Those costs jumped 6 percent in the third quarter, “primarily driven by higher revenues,” the company said Oct. 17.