Bloomberg: Morgan Stanley’s Expanded Bonus Deferrals May Haunt Shareholders
Multiple goals may go into the design of a compensation plan, such as curbing risk-taking or providing incentives for employees to stick around, said Joseph Sorrentino, managing director at Steven Hall & Partners. Still, managers understand the benefit of the savings that come from deferred compensation, said Sorrentino, whose New York-based firm advises companies and executives on pay plans.
“Companies choose to extend vesting, and therefore they’re taking a smaller hit in the near term,” said Sorrentino, who doesn’t count Morgan Stanley among its clients. “But it just pushes everything out. Eventually it catches up.”