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Morgan changing bonuses
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July 10, 2001: 8:27 a.m. ET
Brokerage house replaces part of cash awards with stock, options
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NEW YORK (CNNfn) - Morgan Stanley executives will see cutbacks in their cash compensation after the brokerage house enacts a new pay plan to reduce the size of cash bonuses, a move aimed at boosting the company's bottom line.
In a May 30 internal company memorandum, the company informed Morgan Stanley's top brass – those receiving bonuses above $5 million – that they would receive half their year-end bonus in company stock or options, while those on the lower end, earning bonuses below $250,000, would receive 10 percent of their bonus in stock or options.
The new plan, expected to be implemented at the end of November, first has to be approved by the Morgan (MWD: down $0.59 to $60.14, Research, Estimates) board's compensation committee.
"We now have a consistent formula that no longer varies from person to person across the firm," said Morgan spokeswoman Judy Hitchen. "For some it will reduce their stock option while increasing it for others. The new plan will add to the potential upside of remuneration."
Morgan executives have privately criticized the new plan as amounting to a pay cut following the company's sharply lower second-quarter profit.
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In April, Morgan Stanley joined the bandwagon with its brokerage rivals Goldman Sachs and Merrill Lynch, announcing job cuts in a move to adjust their business in the wake of a slowing economy. 
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Morgan Stanley
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