Bonuses offered to appease veteran reps?

or Register to post new content in the forum

13 RepliesJump to last post

 

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Jul 16, 2007 5:50 pm

Anyone heard about large wirehouse firms (specifically MS) giving long-time advisors (huge producers, Im sure) bonuses
because they were complaining the firm is giving so much money to new reps via
sign-on bonuses?

Basically, veteran reps want a piece of the pie, saying "Ive been here for
15 years and youre giving Joe Blow, who has never worked for the firm, 220
percent of trailing-12."

PM me.

Jul 16, 2007 7:17 pm
staff writer:

Anyone heard about large wirehouse firms (specifically MS) giving long-time advisors (huge producers, Im sure) bonuses because they were complaining the firm is giving so much money to new reps via sign-on bonuses?
Basically, veteran reps want a piece of the pie, saying "Ive been here for 15 years and youre giving Joe Blow, who has never worked for the firm, 220 percent of trailing-12."


PM me.



Nope, not a word. Frankly, I doubt it's true. Every firm recruits, and so every firm would be liable to that sort of talk from their vets. Morale seems very good from where I sit. The Gorman make-over is about done, the stock price is way up and the guys who were hold-overs from the "stocks and socks/propriatary B-shares pay more" days are either silent or gone. J-Mack is very, very popular with the rank and file.



As to 220% of 12T, that's twice what I've been hearing.

Jul 17, 2007 9:56 am

okay, thanks.
Yeah, Im hearing that it's happened on a case by case basis.
I wonder, at the very least, are veteran advisors at all annoyed by the sign-on bonuses offered to new reps?


Jul 17, 2007 10:08 am
staff writer:

okay, thanks.
Yeah, Im hearing that it's happened on a case by case basis.
I wonder, at the very least, are veteran advisors at all annoyed by the sign-on bonuses offered to new reps?




You may find some grumbling, but given that upfront money in recruiting in the business is as common as rain, it's like grumbling about the Sun rising. The management paying that recruiting money has done a great deal for the firm, including pumping up the stock price, so I would hope any grumbling takes that into account.

Jul 17, 2007 10:43 am

First of all, let me say that I applaud your being here at all. We just commented on the idea of RR writers looking in the forums yesterday.


I'm no longer with a wirehouse, but I will say to you that in the branch I came from (which admittedly had more than it's fair share of disestablishmentarianism) this was a recurring theme.


MikeButler222 might be right at the corporate level, but at the branch level it always seemed to us that the firm's money would be better spent trying to increase our production. We also felt it was ironic that the BOM would whip $250-$350M producers and tell them that they were the bottom of the barrel, and at the same time be paying exhorbitant amounts to bring in a guy doing the same numbers!


We once had a classic example, where they hired a guy from Merrill who barely did $250,000 once. He was paid $250M to make the move. In our market $1,000 could buy 3 eighth page ads in the one regional newspaper per week. We knew that if the $250M was spent on CD and Muni ads, we'd have had 5 years worth of advertising! We also knew that ads brought in business, from new clients and existing clients (it's been a while since I ran the numbers). The Merrill broker turned out to be a colossal failure (complete with lawsuits and sexual harassment based visits from HR) the guy never did $200M again.


I'm confident that this is not the national experience, but on a branch level, this is the way it can play out, and in a small branch, that drag on the P&L can have dire consequences (the branch that I refer to has been closed due to the fact that it could no longer be run profitably).  

Jul 17, 2007 11:06 am
Whomitmayconcer:

First of all, let me say that I applaud your being here at all. We just commented on the idea of RR writers looking in the forums yesterday.


I'm no longer with a wirehouse, but I will say to you that in the branch I came from (which admittedly had more than it's fair share of disestablishmentarianism) this was a recurring theme.


MikeButler222 might be right at the corporate level, but at the branch level it always seemed to us that the firm's money would be better spent trying to increase our production. We also felt it was ironic that the BOM would whip $250-$350M producers and tell them that they were the bottom of the barrel, and at the same time be paying exhorbitant amounts to bring in a guy doing the same numbers!


We once had a classic example, where they hired a guy from Merrill who barely did $250,000 once. He was paid $250M to make the move. In our market $1,000 could buy 3 eighth page ads in the one regional newspaper per week. We knew that if the $250M was spent on CD and Muni ads, we'd have had 5 years worth of advertising! We also knew that ads brought in business, from new clients and existing clients (it's been a while since I ran the numbers). The Merrill broker turned out to be a colossal failure (complete with lawsuits and sexual harassment based visits from HR) the guy never did $200M again.


I'm confident that this is not the national experience, but on a branch level, this is the way it can play out, and in a small branch, that drag on the P&L can have dire consequences (the branch that I refer to has been closed due to the fact that it could no longer be run profitably).  




I'm at the branch level. Of course there are always people saying they'd rather have the money spent on recruiting added to their own advertising money. And there's never a shortage of rumors, true and untrue that "they fired Joe doing $250k and hired another guy from ML doing the same production".  That's part of the business as sure as the losers hanging around the watercooling (unknowingly) doing the Arkin/Harris exchanges from Glengarry Glen Ross.



OTOH, MS has seen an overhaul from top to bottom. Deadwood was cut (and trust me, there were more cheers in offices than tears about guys LOS over 11 and doing under $225k being let go), management was cut and recruiting began in earnest. You'd be pretty hard-pressed to find someone succeeding at MS right now bitching (people not making it bitch wherever they are, whatever the situation) about what's been going on since J-Mac returned and the stock price went from $40 to $73.



Oh, and I've never seen an ad, muni or otherwise bring in real business. Phone calls? Yes. Clients you usually don't want? Oh yeah.


Jul 17, 2007 11:18 am

It would certainly not surprise me if successful reps with growing books get bonuses to stay.  Let me rephrase.  They get bonuses not to leave.  The difference is that there is no reason to give a bonus to someone who is not planning on leaving.  


One stipulation of the bonus would have to be that it remains confidential.  Confidential, not just in $ amounts, but confidential that it even occured.


On the other hand, if a rep is asking for a bonus to stay, that rep must be prepared to be terminated immediately. 

Jul 17, 2007 11:29 am

Our experience with ads is quite different from our, but then, that's why I qualified my response as to being a local phenomenon.


Re: Arkin/Harris, I totally agree.


Re: Bitchen, some people will walk around with a loaf under each arm and complain that you got a crumb. Some people will be handed a gold brick and complain about how heavy it is. "Successful" people never stop counting how much they have in relation to the market, as such, if there's money to be spent, they'll want some spent on them, if only just to show the others that "I'm worth it."


You certainly know more than I ever did about the folks at Merrill, and I don't doubt your assessment.

Jul 17, 2007 11:35 am
Whomitmayconcer:

Our experience with ads is quite different from our, but then, that's why I qualified my response as to being a local phenomenon.



Yes, you did qualify it. It's interesting how that varies around the country. That would be an interesting thread subject, "what would you do with $10k in free business growth money".

Jul 17, 2007 12:13 pm



It would be interesting to find out why the reps, who are getting
these "please dont leave bonuses", are considering leaving the firm.
Is it because the firm down the street just offered him 150% of
trailing 12? is there a common thread among the reps who do get these bonuses?

along with the confidentiality terms, there are likely handcuffs involved: "here's a check for $500k. oh, and you gotta stay for 6 more years."

Jul 17, 2007 1:05 pm
staff writer:



is there a common thread among the reps who do get these bonuses?



Yes.  It's called greed. 

Jul 19, 2007 12:04 pm

I remember back in the early 1990's Merrill was giving out something like $100,000 to brokers if they stayed I think 5 years. I would not at all be surprised if MS came out up a program to keep the big producers from leaving.

Jul 19, 2007 12:08 pm

I like your username, pussman.