INVESTMENT bank Morgan Stanley is planning to stop its highest earners claiming any bonus this year, it emerged yesterday, instead making them take the payout in instalments over the next three years.
Regulators have long called for banks to spread the bonuses out over several years both to stop bankers taking extreme risks for short-term personal gains, and to make sure they have a long-term stake in the success of the business.
An additional benefit is that bankers’ bonuses can more easily be clawed back if their performance is, in retrospect, not as good as it first appeared.
The move is believed to be part of a planned shift towards slower payouts and more long-term incentives across the bank as a whole, rather than a change made to reduce the employees’ UK tax bill by avoiding the 50p tax rate.
All staff earning above $350,000 (£218,000) annually and have a bonus of at least $50,000 will be affected, aside from financial advisers, according to Reuters.
Morgan Stanley declined to comment.