January 18, 2013

Morgan Stanley set aside 44 percent of adjusted revenue in its institutional securities business for compensation last year, down from 53 percent in 2011, Chief Financial Officer Ruth Porat said in an interview on Friday.

The investment bank reduced staff levels by 7 percent last year and is in the process of eliminating another 1,600 jobs in institutional securities and related support functions.

Morgan Stanley, which reported fourth-quarter results Friday morning, also told employees this week that it would defer 100 percent of 2012 bonuses for anyone earning at least $350,000 a year and due a bonus of at least a $50,000. Financial advisers in the wealth management business are not affected by the deferral program.

Porat told Reuters thyat less than 20 percent of the bank's staff would be affected by the deferrals, and that the policy targets mainly senior employees.

"Over 80 percent of our people do not have deferrals, and really the view is, people in the earlier part of their career don't have deferrals," she said, adding that the plan "just goes to the alignment of interests" between Morgan Stanley employees and shareholders.

(Reporting By Lauren Tara LaCapra; editing by John Wallace)

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