SB Retention
151 RepliesJump to last post
The LOS bonus is not just a thing that’s based on production, and I’d be surprised if the MS guys don’t have this. LOS stands for Length of Service. It’s to reward you for staying with the company. If you did $1 million in production, it doesn’t mean you’re getting an LOS bonus or the Partners award (the advance). You get this after being with SB for 5 years and doing over $350k, I think the number is. Every comp plan I’ve recently looked at has this in it.
Excitr,
I was told by my manager that the same retention package applies to the bank based advisors.The retention package is very similiar to BofA and ML. Does anyone know how many year the BofA ML retention covered?
Any info on how teams will be treated in this package? That is, if a three person team does $1.5MM in production that’s split 1/3 to each FA, will the award be paid at the higher level (75%) and divided amongst the three team members? Or would each FA be treated as a $500k producer, receiving 30%? Makes a big difference ($375k cash upfront each, vs. $150k). Knowing our firm, I’m going to a**ume it’s the later…any info would be appreciated.
Thanks… Sucks for me, I’m not that far below 500 , plus I don’t get how it can be the same, were going to a completly new BD, not even the jv… So if you think about it, it’s being a smith barney rep, now going to start differnt bd,no retention, what’s stopping people from starting new and getting a transition deal, your starting new anyway… Get some money for it…
excitr1011,
What's ought to stop people from starting new and getting a transition deal is a crushing bear market. If you did 500k last year you'll be lucky to do 350k this year. If you jump ship in this market, I think you'll be lucky to do 250K at your new bd. I think short-sighted reps who "go for the check" will be out of the business in a year or two. Plus, if you stay there you are in a position to snap up lots of new clients from the departed.The way it was explained was that their LOS that was being paid out to them was the equiv. of getting our def comp multiplied by 5. They just would not be eligable for def comp going forward. Simmilar to the def comp x1 deal we just got only they got 5x we got 1x. Now they will take that into the equation on the retention but the SB rep doing 450 got the los bonus, the MS rep got nothing so they are starting with cash in the bank and we are not.
[quote=Lex123]excitr1011,
What's ought to stop people from starting new and getting a transition deal is a crushing bear market. If you did 500k last year you'll be lucky to do 350k this year. If you jump ship in this market, I think you'll be lucky to do 250K at your new bd. I think short-sighted reps who "go for the check" will be out of the business in a year or two. Plus, if you stay there you are in a position to snap up lots of new clients from the departed. [/quote] You are right on...So far the 7-8 people Ive seen that have come in the last 6 months are not doing anywhere near 50% of what their alleged T-12 was. Realize that even staying you would be fortunate to be down 1/3 with no changes. But some I am seeing are down 75%.. Then throw in the taxes from the deal and all of a sudden your paychecks are next to nothing and there is no incentice to try anymore, seen it over and over. Friend of mine got 600K at UBS doing about 400K last summer, he is all fee based and now doing 15 a month. He checks are under $700.00. He now goes in an hour after the bell and is gone 1 minute after the close. 6 year deal, and think he just hopes they can him before the 6 years is up or else he will have spend all his money to live.The way it was explained was that their LOS that was being paid out to them was the equiv. of getting our def comp multiplied by 5. They just would not be eligable for def comp going forward. Simmilar to the def comp x1 deal we just got only they got 5x we got 1x. Now they will take that into the equation on the retention but the SB rep doing 450 got the los bonus, the MS rep got nothing so they are starting with cash in the bank and we are not.
nobody is just "getting" 5 times the normal LOS bonus. It's a zero interest loan that has like a $25k minimum payment per year or your LOS bonus, whatever is greater. In addition, let's say you get $100k for this partners award, and your retention award is $250k, you are probably thinking that the SB guy gets $350k, but not true, he would only get $150k retention because he already got paid $100k from the partners award. Bottom line is that MS guys and SB guys get the same deal.
Correct, but the point is that the 400-500k producer at SB gets cash in the bank through this deal at MS they get nothing… zip
[quote=WirehouseBob] [quote=msbos] The reason for 2010 is that they will show the money coming from earnings and not TARP.
The kicker is if you are at MS and did 475 you got no los loan and no retention. An FA at SB doing 475 at least gets the LOS and no retention. Better off being at SB at the moment if you are doing between 400 -500[/quote]
I am one of those MS brokers that did $485M in 2008 so got screwed on the LOS Loan and now the retention. msbos what was the SB LOS retention for 475M? I have crushed the last two months and now have a T-12 of $525M. Any one think I have any ability to participate in the retention? James Gorman "helping" the brokers by using 2008 has completely killed me. Am I really in the worst case scenario position imaginable?
[/quote] Whirehousebob, what are you doing to kip up the production? Certain product, redoing portfolios, new money, trading? I could use some help...
Correct, but the point is that the 400-500k producer at SB gets cash in the bank through this deal at MS they get nothing… zip
The partners award has nothing to do with the MS deal and was announced long before. It's also just an advance of the length of service award and has to be paid back. It's not a forgivable loan. It's not even an award. It's a zero interest loan that must be paid back. Also, the only way a 400-500k guy gets it is if he's been there over 5 years.
Well if it has nothing to do with the retention award, why are they subtracting the LOS bonus from the retention award? The LOS bonus was announced before I left Smith Barney, back in December, and before Morgan Stanley rode in to save the day.
And I stil don't understand why they will be waiting until January of next year to start cutting checks. In the past year at SB, we've seen three comprehensive changes to our payouts and an absolute annihilation of deferred comp, CAP programs--you name it. Seems like a lot can happen between now and next January.[quote=Bodysurf]
It is good PR to wait. Also a supply and demand issue: where is SB guy/gal going to go in the mean time? MAYBE UBS (how many want to jump in frying pan of Wells Fargo/Wach or ML)? If going indy, when the retention cash comes in shouldn’t matter one bit. Psychologically, it also gives all parties to retention something to look forward to, and I’m sure most of us could use that right now—I think it has many pros to offset the obvious downside.
I think Morgan is doing as good of a job as can be expected navigating land mines…hopefully there is a new story to pound on when the checks are actually cut next year. For example, remember when the worst problem we had was high gas prices and global “warming”? Not too long ago.
[quote=Bodysurf] Well if it has nothing to do with the retention award, why are they subtracting the LOS bonus from the retention award? The LOS bonus was announced before I left Smith Barney, back in December, and before Morgan Stanley rode in to save the day.
And I stil don’t understand why they will be waiting until January of next year to start cutting checks. In the past year at SB, we’ve seen three comprehensive changes to our payouts and an absolute annihilation of deferred comp, CAP programs–you name it. Seems like a lot can happen between now and next January.[/quote]
Body, they are subtracting it because it’s a loan and they don’t want to give more money without the loan being paid. I feel that it’s crap that it’s not being paid until 2010 just like you, I don’t agree with it, I’m not happy with the structure of it, I think it’s crap, not to mention I’m expected to grow my business by 25% over the next 3 years to get the other half of the retention in the worst market in history. the reason they have to wait is to prove that they are not using TARP money to pay us, which I think is a bunch of BS as well. If I leave I get 100%+ up front in less than 2 weeks, and they want to wait a year? And I hear it’s a 9 year contract…a what? 9 year contract for a crappy-ass retention? Yes, certainly better than nothing, but I would not stick around it it were nothing either. No firm has any broker loyalty for any long period of time, and so I expect to get paid for my own loyalty, yes all you retention/transition bashers on this forum (said in advance before you cap on me for wanting retention in the first place).
in fact, NOT wanting retention, or saying you are happy or that it makes you look better for not getting retention is as stupid as the saying about having your cake and eating it too! I mean seriously, I hate that saying. WTF are you going to do with cake if you’re not going to eat it?
not to mention you might as well flush the back end down the toilet. You need 25% growth from 2008 to 2011 to get it. But in 2009 most everyone will be down 20-30% if they are lucky - so from 2009-2011 you need about 55% growth or no back end.
Flush!!!
Sportsfreakbob,
Great point -- except you're being too conservative. I expect gross will be down more like 40-50% this year. If the market drops another 40% in 2009 it might be more in the 60% area. You will need close to a 100% increase just to get back to 2008 numbers.Just got off the phone with another buddy of mine at SB, and he’s PO’d beyond belief. According to him, he has 30 days to sign the contract, else it’s withdrawn. What’s more, it says that if you leave the firm for ANY reason, INCLUDING death, disability, retirement, or being fired–you owe the balance of the retention, plus interest.
Well, this FA is 57 years old, and he took the contract home for his wife to look over last night. If he’s terminated from CitiMorg, he owes the money. If he retires at 65, he owes the remaining balance, plus interest. If he’s run over by a truck next year and is killed or disabled, he owes the rest of the money, plus interest.
He’s out of contract right now. I told him that the freedom to pick up your briefcase and hit the door is worth money; to sign this package will incentivize the firm to let him go for any one of dozens of reasons, and, absent those, it’ll take away his options for the next 10 years (9-year retention begins in January of next year, not when the contract is signed).
I’ll give ‘em credit for this much–it is a “RETENTION” package after all. No rational person on earth could call this a bonus. Godalmighty. It’s like Damocles’ sword.