SB Retention

I’ve heard they’re aiming to replicate the Merrill model.  If that happens, <500k won’t be getting anything, along with anyone still under contract.

i think they may have learned from the outcry of merrill’s deal. merrill’s hemorraged advisors and assets since the deal.

Senior management of these consolidated firms will make a run at using political capital to snuff out the retention and alter the compensation of big firm advisors - and talent will migrate. The advisors who handheld clients for the actions of greedy bankers will be steamrolled. Meanwhile, their “leadership” has torched the industry and left advisors scrambling for a decent firm to serve their clients. What firm is the fairest of them all?    

Wells is paying 100% upfront. Come on over

"along with anyone still under contract. "

SB/MS retention will be out within a few weeks… much faster than Wells/Wachovia.

I agree, < $500k will get no love. Combined they’ve got some 20k FAs… the new firm needs 15k max. They’ll continue to pick up bigger producers and shed most under $500k. That’s going to be a net 5-7k FAs at both firms out the door. 

It’s not that the guy doing $400k does not make money or is inexpensive to replace, it’s the fact that the business and marketplace has shifted and will continue to favor bigger players only within the wirehouse model. 

If you think we get loads of recruiter calls now in this industry, wait a few years. UBS, SB, MS and ML have literally gutted their farm system and bench. Doing that actually for 10 years in fact is what created the crazy recruiting deals of the present day. Deals may  drop back in 09’ as the business continues to contract, but 2-4 years from now when 30% of the big FAs are at or very close to retirement in the wirehouses and the lack of developing FAs catches up in full, the musical chairs game will be played to tunes by bands like Husker Du!!! (umlauts omitted).   There… I just dated myself! : http://www.myspace.com/flipyourwig

you have the deal info?

No, don’t have the deal info, but I’m hearing the same from folks in management on both sides about $500k producers, tighter, leaner, and 15k being the target and goal of the retention package. Word is it will be very on par with the ML deal. Unlike that though, I don’t see firms like UBS putting the super sized meal deal out there this time around. That could really undermine retention IF it is similar to ML’s deal.

Wells deal info?

do you think that MS SB JV will consider producers under 500k who are also under 7 years of LOS? If there is someone there 4 or 5 years and doing 300 or 400k, do you think they will get anything? Have any of the other firms looked at a LOS model for retention bonuses?

The deal will cover producers at 400 and above. 99% of those covered under the Partners program (loan based on LOS bonus) will have a retention package I am told.

have you heard enough from your source that gives you confidence to comment on:

That looks like it could be accurate.

I wonder what they will do with the headcount issue. When MS unloaded a bunch of people in 05, they said if less than 225k and 8 years or more LOS they got the hook. I imagine it will be a higher production number (300 maybe?)and a lower LOS number(6)…any body got a feel for where that may land?

It’s obvious that all these firms are making things up as they go along.  Every time our new president opens his mouth about the outrageous bonuses on Wall Street, it makes me wonder why any firm would want to play Whack-a-Mole by paying another billion or two in bonuses to guys who made a lot of money last year.

We’ll see.  It makes for great Kubuki theater, all the guys who willingly toil away at 40% payouts waiting around for a big check because of merger talks in New York.  It’s just me, but I’ve never understood the economics of a retention package.  If the advisors weren’t going to take a check to move their business to UBS or Wachovia before, what makes anyone believe they will now that they don’t have to worry about C’s headlines anymore?

Nobody from of any relevance at SB would move to Wachovia. C’s headlines were not any worse than BAC MER UBS or even MS.

Whether you care to call it a “forgivable loan” or a bonus, it’s a bonus.  That’s why you’re paying taxes on it.   It’s a big payment to keep people in their chairs for another few years.  I know how they justify it on Wall Street.   But I also know how the headlines will play out.   And if I’m dumb enough to know, so does Morgan Stanley.

I did 270k in 08 after 3 years. No senior partner. Club member FA. Right out of training program. Ranked 1 or 2 in country for the past 3 years each month. Do you think I have any shot at a bonus or should I just give up that dream.

Are you still in the FAA program?  I think for you guys, you’re on a different contract completely.  But as far as what MS will offer, nobody has any idea.

By the way, I was in class 06-01.

I do still get training bonuses so maybe i will be exempt from the reten bonus just like i am for deffered comp. That would be depressing.

[quote=mysteryman]I did 270k in 08 after 3 years. No senior partner. Club member FA. Right out of training program. Ranked 1 or 2 in country for the past 3 years each month. Do you think I have any shot at a bonus or should I just give up that dream. [/quote]

You’re probably the only one worth keeping.

morgan stanley FA. LOS 6. T12= $345k. no partners. 30 years old. any chance at retention or should i try to find another firm?

I would say that if the minimum level for a retention deal is 400k. That nobody below 400k is getting a deal, now matter what age you are.

So do you think that someone who is LOS4 and still an FAA (part of the training program because training program is technically 5 yrs) who has T12 of 760K would not get anything because he is still an FAA and part of the training program?

Tick…

I’m going to be the resident contrarian, and suggest that there might not be a retention package at all.
Every day MS can put off offering a deal, virtually everyone’s T12 goes down, considering what the production was firmwide  going into the third and fourth quarters.  That alone is inducement to wait, especially when you consider that the deal isn’t supposed to be consummated until later in the summer anyhow.
Couple that with the new rhetoric coming out of Washington WRT Wall Street bonuses . . .

You’re wrong Body.

[quote=Squizz]You’re wrong Body.

Yep…you’re right my bad.

[quote=Squizz]Yep…you’re right my bad.

It’s interesting to watch you guys squawking about retention.



I guess big producers don’t like financial risk or fear any more than smaller producers.

Oh I am not squawking…I am hopeful that it happens.

Squizz is dead on. There will be retention, based on 08 t-12, and it will probably be for 400k+ producers

I wonder if I’ll be able to use these big retention packages to help with my prospecting.

LOL…good thought Body. Most of us need good financial advisors.

MS/SB package to come very soon. SB brokers will have larger pool of money, but only b/c they have more brokers. Bonuses will be equal among all FAs, according to their level of production of course.

NEW YORK (AP) – Morgan Stanley could announce this month that it plans
to cut up to 4 percent of its work force, The Wall Street Journal
reported.

The report, citing anonymous people familiar with the plans, said the Wall Street firm could cut 1,500 to 1,800 jobs. The reductions could be announced this month, according to the report posted on the newspaper's Web site.

Morgan Stanley representatives were not immediately available to comment on the report.

The additional cuts come on top of about 7,000 job cuts Morgan Stanley made in 2008, and amid layoffs across nearly every sector of the economy as the nation remains stuck in a recession.

The Journal noted that none of the cuts would come in the global wealth management business, which is getting ready to combine with Citigroup Inc.'s Smith Barney brokerage unit. In a deal announced last month, Morgan Stanley will own a 51 percent stake in the venture.

Morgan Stanley has about 8,400 brokers.

I bet WFC gets their package out before this one.

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.

[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.

I’m sticking with my original prediction:  no retention package.  

[quote=Squizz]You’re wrong Body.

Nope,

[quote=Squizz]Nope,

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.

Body,

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.

[quote=Squizz]Body,

Oldnewguy,

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. 

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.

Suicide.  Yes.  Who knows what would happen to the stock price if they didn’t offer a big retention package?  Might even drop by 40 cents a share or something.  Of course, in Citi’s case, that’s like a 10% move.

I don’t begrudge anyone at Smith Barney the money to which they feel entitled, because they’re moving out from Citigroup and into Morgan Stanley.   It’s just amusing to watch how the retention bonuses are figured.  An FA who did $850k in 2007 and $502k in 2008 is going to get a nice package to stay.  An FA who did $225k in 2007 and $495k in 2008 will be told he’s a POS, and get nothing. 

I hope you get your money, all of you.  And I hope it’s on the headlines of every paper in America.  Should help me to wrestle accounts from the SB’s of the world.  Wall Street is the only institution on planet earth which gives its sales force giant bonuses to stick around, just because another firm has swallowed them up, all while their clients’ accounts have been annihilated. 

Good luck!

Why should wish ill will on our fellow FA’s or begrudge them for being awarded a retention check? 

We shouldn’t.  But why should the $450k producers get nothing? 
In my old SB branch, there are 9 guys who are between $350-$499k.  If they’re not worth keeping around, let them go.  If they are, pay them to stay, just like the others.

Get no argument from me on that.

Body -

I don’t think that a $450k producer should get nothing either. If they do in this scenario, they’d be smart to leave and take a check from someone else. With the new firm having 22,000 or whatever advisors, they will likely be forced to have a cutoff point that makes sense to make the number of advisors smaller.



The whole argument of whoever said something like “making your clients go through hell so you can get a check” or inconvenience or whatever, well, yeah, if they are loyal clients and you are managing their money, it is in the client’s best interest for you to be happy and successful so you can focus on making them money and not worry about your own well being.



While I’m not yet over the million mark (especially being fee-based in this crappy market) if the retention offer isn’t good enough, I’ll likely depart myself as I need to do what’s best for my family and take advantage of the situation. Change is imminent. Why not make the change work best for everyone-myself included? And no, it’s not tax payers paying my check either. The amount of revenue generated by my commissions more than covers it–that’s why it’s a percentage of past production! If they give me 100% and require me to stay for 8 years in order to have the whole amount and I’m at a 42% payout, then that means they are giving me 12.5% of my 2008 production for every year that I stay for 8 years. Still works out much better for them and they still make a huge profit, and I stay happy and committed for a long time.

What annoys me is the proposition that you have a whole bunch of guys itching to leave, when they clearly aren’t.  If they haven’t left the train wreck that was Citigroup, why should they leave now that Morgan Stanley will be running the show?  And from the Morgan side, if they were willing to work for 40% payouts at Morgan Stanley without taking a deal elsewhere, why should we suddenly believe that a merger with Smith Barney is somehow the last straw?

I do have an axe, of sorts, to grind with Citigroup.  I’ve only been in the business two years, and wanted to build a full-discretion, fee-based business.  And in September I had about fifty accounts in the GPM program–not a lot, just about $9 million or so, and went completely to cash and short ETF’s.  I was immediately in violation, and would come to work every day with a giant pile of violations on my desk.  Come the end December, I was told that I would either have to have my clients fully invested in the markets by the end of the day on 31 December, or that no doing so would be construed as my resignation from the firm.

So I took door #2.  I’m sorry that so many brokers have seen their net worths blow up, along with whatever golden handcuffs they had.  But we’re not in this business for us.  For that matter, we’re not in the business for our firms.  And if the only reason you’re considering sticking around the one you’re at is because they’re going to cut you a check, maybe you’re at the wrong one.  My posts might make you laugh; I’ll admit I don’t make nearly as much money as you.  But there’s a good chance my clients didn’t lose nearly as much as yours, either.  Which means more.

As I PM manager I feel your pain. But GPM is just that it’s guided. ON the PM platform you have a little more autonomy but not much.

And you’re right, I don’t ever try to time the markets.

Fair enough.  I hope you get what you want.
And I was with SB, by the way.  Loved Smith Barney, and despised Citigroup, who was instrumental in bringing this financial calamity upon us. 

[quote=Squizz]

What the heck are you talking about? SB doesn’t dictate anything to me.

[quote=SB No more] [quote=Squizz]

I also do a substantial amount of business with foundations. And you’re not doing that with Linsco Private ledger. You all need to quit assuming that you know things that maybe you don’t.

Squizz have you heard anything regarding retention for S/B brokers in the Citibank branches.

Squizz have you heard anything regarding retention for S/B brokers in the Citibank branches.

[quote=TOP BROKER]Squizz have you heard anything regarding retention for S/B brokers in the Citibank branches.[/quote]

I’m not sure why SB brokers in Citi branches would get retention. I havent heard anything about that, but more important, the SB Brokers in Citi branches are not part of the MS joint venture. They are going to stay with CITI, and ultimately be under a completely different broker dealer.

[quote=Squizz]
 And you thinking that MSSB offering a retention award will give you additional fodder to go after accounts from the 2 firms is laughable. I am not slamming you, your posts just make me laugh.
[/quote]

I’m not slamming YOU, but if you don’t understand how it’s going to make it easier for us to get ink on paper when it comes to ACATS forms, you are REALLY out of touch with how your clients are feeling right now. 

IF MSSB retention makes front page news in the WSJ or the business section, it will just make it far easier for clients to understand the benefits of working with an experienced professional who is in private practice, not a salesman for a big firm who can’t seem to even manage their own assets prudently.

[quote=Squizz]
 And you thinking that MSSB offering a retention award will give you additional fodder to go after accounts from the 2 firms is laughable. I am not slamming you, your posts just make me laugh.
[/quote]

I’m not slamming YOU, but if you don’t understand how it’s going to make it easier for us to get ink on paper when it comes to ACATS forms, you are REALLY out of touch with how your clients are feeling right now. 

IF MSSB retention makes front page news in the WSJ or the business section, it will just make it far easier for clients to understand the benefits of working with an experienced professional who is in private practice, not a salesman for a big firm who can’t seem to even manage their own assets prudently.

[quote=HymanRoth] [quote=Squizz]
 And you thinking that MSSB offering a retention award will give you additional fodder to go after accounts from the 2 firms is laughable. I am not slamming you, your posts just make me laugh.
[/quote]

I’m not slamming YOU, but if you don’t understand how it’s going to make it easier for us to get ink on paper when it comes to ACATS forms, you are REALLY out of touch with how your clients are feeling right now. 

IF MSSB retention makes front page news in the WSJ or the business section, it will just make it far easier for clients to understand the benefits of working with an experienced professional who is in private practice, not a salesman for a big firm who can’t seem to even manage their own assets prudently.

Maybe you could buy a marketing list of clients of Smith Barney brokers that are on a retention package.

[quote=HymanRoth]

[quote=HymanRoth] [quote=Squizz]
 And you thinking that MSSB offering a retention award will give you additional fodder to go after accounts from the 2 firms is laughable. I am not slamming you, your posts just make me laugh.
[/quote]

I’m not slamming YOU, but if you don’t understand how it’s going to make it easier for us to get ink on paper when it comes to ACATS forms, you are REALLY out of touch with how your clients are feeling right now. 

IF MSSB retention makes front page news in the WSJ or the business section, it will just make it far easier for clients to understand the benefits of working with an experienced professional who is in private practice, not a salesman for a big firm who can’t seem to even manage their own assets prudently.

Recruit Back-Ends

It doesn’t affect any back end deals. But your retention award will be reduced by the amount that remains or your original FL, prorated by the month.

[quote=Hank Moody]

[quote=HymanRoth]

[quote=HymanRoth] [quote=Squizz]
 And you thinking that MSSB offering a retention award will give you additional fodder to go after accounts from the 2 firms is laughable. I am not slamming you, your posts just make me laugh.
[/quote]

I’m not slamming YOU, but if you don’t understand how it’s going to make it easier for us to get ink on paper when it comes to ACATS forms, you are REALLY out of touch with how your clients are feeling right now. 

IF MSSB retention makes front page news in the WSJ or the business section, it will just make it far easier for clients to understand the benefits of working with an experienced professional who is in private practice, not a salesman for a big firm who can’t seem to even manage their own assets prudently.

At the heart of the issue is whether such payments would impede a
financial institution from using bailout funds for their originally
intended purposes: to stabilize their businesses and defrost the credit
markets."

It was only a matter of time. This will get big time scrutiny. The only question is whether or not the bonuses will be rolled back under pressure. The above quote, from the article shows that the last comment in the article was correct - the legistlative beaurocrats wouldnt know what it takes to stabilize a business like ours if it bit them in the ass. Its all about the show, and looking good in a high profile way to their constituents.

Yep…

I believe it will happen as well. They are better to announce earlier than later though. Hopefully Monday.

I believe it will happen as well. They are better to announce earlier than later though. Hopefully Monday.

http://wallstreetletter.com:80/Home/ArticleLogin/2092704/MorganSmith_Barney_To_Pay_Retention_To_75_Of_Combined_Force.aspx

[quote=uptick09]

I just got a call from a friend of mine at Morgan Stanley, who assumed I was still at SB.  He had been told last week that there would be a retention on the MS side, similar to what’s been posted above.  He wouldn’t be eligible, because he only did 450 in production last year.

I’m sticking with my original prediction.  For that matter, it wouldn’t surprise me if there were no merger at all.

I want my 2 dolllars!

I can just hear it now:



"Welcome to Bodysurf Psychic and Brokerage, may I take your order?"



Seems like you tend to stick to your opinions. Anyway, why would anyone be surprised if there were no joint venture? These days with the craziness we’ve experienced, nothing is done until it’s done. From what I read, both firms have the option of pulling out anytime they want without any consequences. Not to mention, even after it goes through, it can be stopped. It’s in stages and certainly change.



Lastly, he wasn’t told what the retention will be, as it hasn’t been finalized and announced yet. The retention is supposed to be the same for both SB as well as MS. No difference.

“Bodysurf Brokerage”.   Hmmmmm.

CNN just played a tape of Gorman telling everyone (on a conferance call) to not use the word “bonus” in regards to retention.  Sounded pretty flimsy how he was skating around the heat out there.  Then report went on ask how these firms that are losing money can offer anyone any money regardless of what word is used, “award” or “bonus” or "retention…

Anderson Cooper’s blog:
http://ac360.blogs.cnn.com/2009/02/11/when-it-comes-to-bankers-i-so-miss-hanging/

I miss hanging. Beheading is nice, too, but it’s more messy.
Besides, with a good hanging, you get to watch legs flail. And nothing
beats legs a-flailin’.

Why, besides simply an appreciation of the art, do I miss hanging? One word: bankers. You see, we recently gave some bankers at Morgan Stanley and Smith Barney, and the like a whole lot of money. Money measured in the billions. In fact, money measured something on the order of $60 billion for those two companies alone.

Link to the conference call:
http://www.huffingtonpost.com/2009/02/11/bailout-recipients-giving_n_165624.html

It was stressed that it is an award and not a bonus, because it’s not a bonus. If it were a bonus, there would not be a contract behind it and it would be paid as income simply for the business we did in 2008. And god do I wish it would really be a bonus and they would just give us money! Yeah.



I can hear my BOM saying it now, "Great job last year MrBig, since you did so well, here’s an extra $1,000,000 just for the Frick of it. No strings attached."



Oh crap, must have been daydreaming, sorry.

It is fascinating how those two blogs have so little interest in understanding the facts…I think if the average FAs was called an “executive” to their face, they would want to punch someone.  Oh well, everyone has their voice if they have internet access, even if they are completely ignorant.

Retention is still being put together.

I have heard that the package is being delayed, may be a few months before it is final. Apparently they are extening due date in partner award contracts. Any one know much about this?

Partners award is being paid out on March 13

If we do not hear anything by the end of next week I am going to assume that we are just being strung along like the folks at WS and will take my business to UBS.

smells like a plot drag this out so that our t-12’s suffer and leaving becomes less attractive.

It is supposedly going to be based on 2008 production, no matter when it is announced or awarded.

They need to do something pretty quick.  Another two weeks like the last two, and there won’t be a Citigroup for MS to write the check out to.

It looks like Squizz was right.  Details hit the newswires this afternoon.  Apparently, now managers know the full story.  Does anyone want to share to end the suspense?

My buddy at SB just phoned me on the way into the meeting.  He said it was a half-upfront and half-backend deal, going from 20bp to 75bp on the high end for the up front cash package.

20 to 75 basis points or percent? I am scared by how many posts on these forums show that the writer doesn’t understand what a basis point is.

First post here.  This forum has been very helpful and informative.  My
2008 production was a bit under $400K.  I know I’m shut out of the
initial package but I think I saw where you could get something in a "grow your production 25%"
scenario.  Is that just for the $500K and up crowd as well or is that open to FAs at all production levels? 



Thanks.



BF

I apologize–it was percent.

Another friend called after the meeting.  He barely cleared the 500k hurdle in 2008.  His package is for 30% upfront, with another 30% payable if he grows his biz 25% by end of year 2011, to 625k.

But they did something funny with the advanced length-of-service bonus, which is going to be paid in March.  In his case, it works out this way:  he gets $66,000 LOS bonus payable in March, then the balance of his $150,000 retention bonus paid in January, 2010, which is $84,000.  I asked him why, if the money was set aside right now, everyone had to wait until January of next year, and he didn’t know.

Thanks for the info!  I'm sure you already know this, but just in case the TARP police are listening, the "advanced length-of-service" isn't a bonus, it's a loan. 

The reason for 2010 is that they will show the money coming from earnings and not TARP.

anyone hear if its the same for citibank branch advisors...the ones who are not part of JV?

anyone hear if its the same for citibank branch advisors…the ones who are not part of JV?

The slick thing they pulled was making it based on 2008 calendar year and not fiscal year (ending in Nov). This hurt a lot of people who sprinted to the finish in November and had a down december.

[quote=msbos] The reason for 2010 is that they will show the money coming from earnings and not TARP.

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,

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,

That’s a good point… Thanks

what ever trickles to your own number, so you are a 500k producer.

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,

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.

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.

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

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. 

[quote=Bodysurf]

[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.

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,

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.

Bodysurf,

I don’t think he’s going to stay anyhow.  In 2001 he came over from Morgan Stanley on a 7-year deal.  But he and a few dozen others in our region were offered an addendum to their contract, which extended his promissory note to 9 years.  He read the addendum to me over the phone, and said there was nothing about extending his CONTRACT for another two years, just the term of the loan forgiveness.  The manager told him that he would have an additional $44,000 taken out of his retention package paid out next January, because he’s still under contract for 2008 and 2009.
He went crazy, said that wasn’t the deal, even called up his former manager to ask him what he’d been told.  I think he’s walking.  He’s got an offer from Wachovia for 1.5x, and he’s also thinking about going indy.

Body, do you know if the 1.5x he’s offered is all upfront? Can you possibly get me any details on that? Wach is presenting my offer tomorrow and I’d love to know if I’m getting all I can get or not. I’d be happy with 1.5x

No, he’s getting half up front, and half on the backend.  In order to qualify for the back end bonus, he has to grow his business 25% before the end of 2011.  2010 maybe?  2011 I think.

If any reps want the absolute best deal at a wire house or to go independent with THE best of class firm please call me at 515.956.9990. As a former MD with ML I offer white
glove service. Ask for Dan (Partner)

If any reps want the absolute best deal at a wire house or to go independent with THE best of class firm please call me at 515.956.9990. As a former MD with ML I offer white glove service. Ask for Dan (Partner)

Please give me a call. 415.956.9990. I am a former MD with ML and now recruit the best advisors in the US. I know most everything that is going on out there.

Did you change your phone number?

Please give me a call. 415.956.9990. I am a former MD with ML and now recruit the best advisors in the US. I know most everything that is going on out there.

You guys do know quite a bit. But if I can shed any light out there let me know. Registered Rep has called as I am a great source.

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