Morgan Stanley International – the London office of the U.S. investment bank, has just released its results for the year ending December 2013. They don’t look too good, especially if you work for Morgan Stanley and have an inferiority complex regarding your rivals at Goldman Sachs.
For the year ending December 2013, Morgan Stanley paid an average of $297k (£184k) to its London-based staff (including pensions and employer’s national insurance). That’s not too bad. Except that over the same period, Goldman Sachs paid its London-based staff an average of $610k (£362k).
Suddenly, Morgan Stanley looks a bit impecunious. In January 2013, Morgan Stanley CEO James Gorman exhorted employees who don’t like their pay to quit. If they could go to Goldman Sachs, some of them might now do so.
Worse, pay at Morgan Stanley International is falling. It dropped 3.5% in 2013 and is likely to fall even further this year. Morgan Stanley is targeting a compensation to revenue ratio of 40% in its investment bank globally and needs to cut last year’s ratio of 42%. Meanwhile, Goldman Sachs is on track to pay its London staff an average of £440k this year, assuming that it accrues an equal amount of compensation in the second half of the year as the first (which isn’t always the case).
Where jobs at Morgan Stanley have been increasing
Even if it doesn’t pay as well as Goldman Sachs, the happy news is that Morgan Stanley International has been creating an abundance of new jobs.
Between 2012 and 2013, Morgan Stanley increased its UK-based operations headcount by 25%, an increase of 692 people. Over the same period, the bank increased its non-infrastructure headcount by 34%, adding 463 people. It doesn’t indicate the nature of these new hires, but it seems highly likely that Morgan Stanley – like other banks – has been adding technologists and risk and control staff.
The split between ‘infrastructure’ and ‘business unit’ staff at Morgan Stanley International underscores how much easier it is to get a job in infrastructure than the ‘business’. In 2013, infrastructure staff outnumbered business staff by a ratio of 2:1. Maybe that’s not so bad, now that infrastructure staff are earning huge amounts of money.