SB Retention
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Wait a minute, two huge companies merge with many overlapping jobs and therefore a 4% cut is a surprise?
I bet WFC gets their package out before this one.
I'll take that action. Put me down for MSSB beating WFC to the punch with their package.
I Think he was being sarcastic[quote=JamesF] I bet WFC gets their package out before this one.[/quote]
I’ll take that action. Put me down for MSSB beating WFC to the punch with their package.
[quote=Squizz]You’re wrong Body.
There will be a retention it will be based on 2008 gross or the T12 which ever works best for the broker. And retention packages have little to do with the bonus structures that the press is complaining about. Neither Morgan Stanley or Smith Barney have received any tarp money. Citigroup has but none of it went to SB. MS got money from Mitsuibishi. My information is good info from good sources, not some lame opinion on news that doesn't apply.[/quote] Heard from Manager at MS that retention is no longer a sure thing, "50/50 at best". Have you heard the same? That would be incredible, but he went into long winded explanation about TARP and coming up hiring and up front deals are going to be nearly extinct from MS. He pretty much said brokers are going to have very little leverage.Nope,
I was in a conference call today and the head of MS and Charlie Johnston both said the retention award will happen and details will be announced a few days after the 13th of Feb. Brokers Award will be based on 2008 gross and will be the same for SB and MS brokers. They said we will definately have a retention award, that it's going to happen and I don't think they would say that if they thought it was going to not happen for any reason. That MS manager should have been on the same call that took place at 4:15 ET[quote=Squizz]Nope,
I was in a conference call today and the head of MS and Charlie Johnston both said the retention award will happen and details will be announced a few days after the 13th of Feb. Brokers Award will be based on 2008 gross and will be the same for SB and MS brokers. They said we will definately have a retention award, that it's going to happen and I don't think they would say that if they thought it was going to not happen for any reason. That MS manager should have been on the same call that took place at 4:15 ET [/quote] his info was yesterday morning and he shared it with about 1/2 the guys. Ok thanks for the info.Will it be in cash? Or in stock? According to our new president, you can issue all the stock bonuses you want, as long as you pay back your TARP money before the stock vests.
I guess I don’t know what the point of the big speech today was, if they’re going to let two TARP firms pay billions of dollars in retention bonuses, in cash, to guys who are already pulling in–by definition-- $250,000 minimum in income. It combines the two things they really hate to see in the headlines: TARP firms using their funds to buy up other firms, and TARP firms paying enormous cash awards.
No dog in the race. I’m just curious whether anyone saw Obama’s speech today besides me. Doesn’t sound like it.
When I was at SB I remember some of the conference calls too. I remember one where they said Citi’s total exposure to subprime was less than two billion dollars. Later they said that they wouldn’t be bailing out the hedge funds, one of which was run by Pandit, just before bailing them out. On another call they said that they would indemnify buyers of the auction rate securities, before changing their minds, then changing their minds again and paying back half. On another still they said that they would under no circumstances be cutting their dividend, two days before announced a cut to the 2008 dividend. On another call they said they would absolutely not bring the SIV assets back onto Citi’s balance sheet; a week later they brought billions of dollars of SIV’s back on. Why anyone takes Citi’s or SB’s word for anything after the debacles of the past year is a mystery to me, but the one thing that doesn’t lie is the stock price. Down 94% in a year.
When you have a big check in hand, that would be news indeed. But considering that most of what you hear on SB conference call is a negative indicator of what’s to come, I wouldn’t be looking at new houses over the weekend.
BodySurf, I agree with your posts. SB guys, I'm rooting for you, but if the politicians start to get word of big fat retention checks, there could be trouble.
You know, with all firms under pressure, if you were management, you have to start making calculations about how many guys would actually leave vs. the crap your gonna take for paying out "bonuses" with tarp money. I say that because John Q. Public and the politicians don't know or care about the difference between "bonus" and "retention bonus".Body,
I am sorry but you really have no idea what you are talking about. If you aren't at SB or MS why are you even worried about it? It will be cash and forgivable loans probably tied to a 7 or 9 year agreement. The bottom line is any bank or broker dealer can buy another but if the brokers defect to another firm and take their books what are they really buying? All I have been doing is passing on information. If you guys don't like it or agree with it I could give a crap. If it happens great...thats what I am being told. I think it will happen. If it doesn't thats ok too, it just means that I will move at some point in the future. ML and other firms are blowing up their training departments, the have deemed it's too expensive to train someone that most likely won't make it in the business. The top producers will always get recruited. Most just produce too much revenue not to have value. So time will tell, I am guessing the retention awards will be exactly what we are being told.If MS & SB "got it" (the new sound byte for 2009- all the kids are saying it), they would scrap the retention bonus idea and increase payouts for a guaranteed 5+ years by 500 to 1000 bps. It wouldn't show up on the dumb*ss financial or main stream reporter's radar since they can't figure out what the hell is going on anyway.
In theroy that sounds like it would make sense but it really doesn’t. I am not sure how a firm handles accounting on a FL, but it makes sense that it’s only accounted for as an expense as it’s forgiven.
Plus locking the award in at 2008 T12, seems like it would be cheaper than giving an accelerated payout over the same period of time. A 50% award only increases a payout by 5.5% a year over 9 years and much less if business grows over that period which it should.[quote=Squizz]Body,
ML and other firms are blowing up their training departments, the have deemed it's too expensive to train someone that most likely won't make it in the business. The top producers will always get recruited. Most just produce too much revenue not to have value. So time will tell, I am guessing the retention awards will be exactly what we are being told.[/quote] Squizz, Since you brought it up, my local SB branch says I still have a 2009 FAA training date...can I trust that or will MSSB shut down the pipeline until things settle down?Oldnewguy,
Sorry, I have no idea. I haven't heard anything about changes to the training program and the 2 that we have in our office are still there.Squizz info re the 4:!5 conf call today is 100% correct. I was on the call and everything he says was stated on the call
Yeah SB has spewed more than their share of bullsh%t in the last year, but i think this is different.
This is a pretty transparent thing, its not like 'we only have $2billion in sub prime on our books. The money is coming from the new venture, as a separate entity.
In addition, regarding credibility, all the facts that Squizz mentioned were clearly stated, not by Charlie Johnston of SB, but my James Gorman of MS.
I can verify what Bob and Squizz are saying. Anyone who says otherwise is just taking guesses based on the media’s witch hunt.
Probably so. But this is a discussion forum, so don’t be so touchy just because somebody else doesn’t agree with you all the time.
Some of my best friends are at SB. One of my closest has been there for 35 years, from the old EFHutton days. He has a big display on his wall of his business cards throughout the years, something like two dozen of them. He’s never gotten a retention package. Firms are mismanaged and disappear, and are swallowed up by other ones. It’s only recently that they’re starting to give people big bonuses to stay put in the same chairs they’ve been in for years. Many of them are still under contract to SB in the first place, looking for a retention package because MS is now on the scene about to cut some big checks.
I just never understood it. Brokers could always walk with their books, as I did. If brokers are willing to put up with the most dysfunctional financial institution on planet earth–Citigroup–why does anyone believe they won’t willingly slave away for the benefit of Morgan Stanley?
[quote=GoodTimes]
If MS & SB "got it" (the new sound byte for 2009- all the kids are saying it), they would scrap the retention bonus idea and increase payouts for a guaranteed 5+ years by 500 to 1000 bps. It wouldn't show up on the dumb*ss financial or main stream reporter's radar since they can't figure out what the hell is going on anyway.
[/quote] Wow you think that is good? Man I sure dont. What is to prevent the firm the following year to say the following.... Guys, the cost of business has gone up more than we anticpated. As a result, we looked at all of the comp plans on the street and we feel great about what we are instituting. It represents the highest pay out of any wirehouse firm on the street! I think you'll agree with me when we say at _________ we are leading the pack and are the preferred firm for advisors to want to work. What we are doing is going to pare back the comp to reflect these changes in the economy and gets us back in line with being competative on the street. Long and short of it, is you end up with a small grid increase for a year or 2. Its a GREAT deal for the firm for a myriad of reasons.... PR and they sell you on what a great deal it is for you, until they start chipping away at it annually starting in 2010. They will tell you that they really arent touching the 500-1000 Bp but rather, they are adjusting what would have been the "normal grid." Personally, Id want no part of it in terms of thinking its somehow a "good deal."you people who keep talking about executive compensation and Obama need to stop already. You clearly did’t even understand what he was talking about. He was talking about EXECUTIVES of companies, those RUNNING the companies that are poor performers being rewarded for the firm’s poor performance. FA’s do not fit into that category, not to mention a retention package is not a compensation bonus anyway. It’s a contract to keep a top producer producing with the firm. Know what you’re talking about before posting a bunch of BS.
Lastly, with the comments about what Citi says, yes, I’m with you on that, but what the CEO of Citi says and what the SB & MS says and how they act are two completely different things. Not paying a retention bonus with the number of top producers the combined firm has would be plain suicide. I think the there’s a total of 3,000 producers over $1 million in the JV.