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Still not happy …

… but at least there’s a semi-reasonable explanation for the most widely reported statistic regarding 2010 compensation; one that I can live with if I have to. Now, if we could just get our stock back out of the doldrums and performing again, at least my worries about the future would diminish, even while I’m still struggling through the present.

Morgan Stanley staffers had a chance to catch up with CEO and President James Gorman at a firm wide meeting Monday. On the top of their minds: pay.

The New York investment bank told employees Friday what their bonuses would be, and the early reaction among many was disappointment.

Staffers in the investment banking and trading unit, for example, were miffed that their pay was down by 2% this year, despite a 27% bump in revenue. For some employees, the bonus cuts were deeper, 10% to 25%, to make up for new staff hired to turn around Morgan Stanley’s lagging fixed-income trading unit.

Adding to the confusion was a headline number for per-employee compensation, which showed a 7.5% increase firmwide to $256,600, from about $238,600 in compensation for each employee in 2009.

But that statistic doesn’t take into account the fact that Morgan Stanley added more than 20,000 employees about five months through 2009 through its brokerage joint venture with Citigroup’s Smith Barney. That new army of employees didn’t collect compensation at Morgan Stanley for the first part of 2009, but did for all of 2010, leading to a higher compensation figure overall.

After adjusting for the surge in employees, the compensation figure would have been down about 3% instead of up 7%, Gorman explained to employees, according to one attendee.

Since compensation is always a hot topic in January, Gorman answered some questions pre-emptively, including why the firm paid out a higher percentage of employee’s bonuses in restricted stock and other deferred pay vehicles that employees can’t touch for awhile. (The firm increased the average amount of year-end compensation subject to such deferrals to 60% in 2010 from 40% in 2009. For senior executives, the figure rose to more than 80% from 75%.)

It was important to show “discipline” in aligning employees’ pay with shareholders at a time when regulators have been focusing on higher deferrals, the CEO explained. As for the lower amounts, he told employees that the firm needs to “show consistent performance” and further raise revenue in order to see a rebound in pay.

via Morgan Stanley CEO Tackles Staffers’ Pay Gripes – Deal Journal – WSJ.