The chairman of Morgan Stanley,
John Mack, has said that bankers are still paying themselves too much.
“I still don’t think the
industry gets it,” Mr Mack said.
Banks are reforming pay by focusing
too much on structure – such as deferring bonuses to later – rather than the
huge amounts being paid out, he said.
Earlier this week, the New York
state Comptroller said that Wall Street banks may have paid more than $55 billion
in bonuses last year.
“If we don’t do something, the
government will do something” on pay, Mr Mack said.
The issue of bonuses has become a
huge political issue on both sides of the Atlantic as many of the banks that
are paying bonuses to staff made losses during 2009 and were bailed out by taxpayers.
On Thursday, Royal Bank of Scotland
– which is 84 per cent owned by the UK government – said that it made a loss of
$5.5 billion in 2009, but will pay $2 billion in bonuses to staff.
Mr Mack – speaking at Queens
University in North Carolina – cited the example of a trader that recently left
The 28-year-old trader’s unit had
earned as much as $400 million for the bank.
Morgan Stanley had offered to pay
him $11 million, but the trader left to join a hedge fund that paid him $25 million
Mr Mack said, according to Bloomberg News.
Morgan Stanley reported record
losses in 2008 and survived the financial crisis because of government aid.
Mr Mack recently stepped down as
chief executive but remained chairman.
He has not taken a bonus for the
past three years.