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Morgan Stanley pays staff £10bn

Bank uses 51% of its revenues to reward staff despite making a loss in fourth quarter of 2011

Morgan Stanley has used more than half of its 2011 revenue to pay its staff, providing another illustration that City pay is not always linked to performance.

Morgan Stanley’s .4bn (£10.6bn) payout to staff represented 51% of its .4bn revenues, although its chief executive, James Gorman, insisted the high ratio was due to deferred bonuses from previous years.

The figures from Morgan Stanley – which fell to a loss in the fourth quarter because of a .7bn charge to settle a case with bond insurer MBIA – are the latest to be reported by the major players on Wall Street and in the City.

Its rivals used less of their revenue for pay – Goldman Sachs’s used 42% of its revenue, while JP Morgan’s used 34%.

Goldman began to inform its staff about the size of their bonuses on Thursday, the day after it was accused of living in a “parallel universe” when it emerged its staff would pocket an average of £238,000 each.

Morgan Stanley is said to have capped cash bonuses at 5,000, deferring a larger proportion of payments into shares, and in the fourth quarter, because of the loss, used 67% of revenue to pay staff.

Bank of America, the second biggest bank in the US, also reported on Thursday and swung back to a profit after .2bn of losses a year ago. Net income was .4bn for the full year and chief executive Brian Moynihan said the bank was entering 2012 “stronger and more efficient after two years of simplifying and streamlining our company”.

The bank, which bought Merrill Lynch during the 2008 banking crisis, is considering issuing bn of shares to pay bonuses to staff instead of cash. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds