The CEO of one of the country’s largest investment banks has some choice words for any employees upset about the prospect of a smaller paycheck this year.
James Gorman, the head of Morgan Stanley, said that if his workers are so angry about their latest, trimmed-down paycheck, it’s probably time for them to go. Gorman stands in contrast with many of his executive counterparts, who have largely stayed silent on the issue of declining compensation, despite an industry-wide restructuring.
“I say [to disgruntled Morgan Stanley employees], listen, you’re naive, read the newspaper, number one,” Gorman said in an interview with Bloomberg Television. “Number two, if you put your compensation in a one year context to define your overall level of happiness, you’ve got a problem that is bigger than the job. And number three, if you’re really unhappy, just leave. Life’s too short.”
Morgan Stanley announced earlier this month that it would cap cash bonuses for 2011 at $125,000 and that its executives — including Gorman — wouldn’t be getting any cash bonuses, according to The New York Times.
Gorman and his employees at Morgan Stanley aren’t the only ones on Wall Street contending with smaller paychecks. Anxiety over the state of the global economy, slow dealmaking and a boost in public anger over the financial industry’s high pay have likely pushed firms to slash their compensation pools to the lowest level since the 2008 financial crisis, the Wall Street Journal reports.
And that’s for those that’ve kept their jobs. All told, Wall Street laid off more than 200,000 employees in 2011 alone.
“The world has changed and the banking industry has gone through a fundamental change and we have to readjust,” Gorman said in the interview.
Many workers have had trouble coming to terms with the new reality. Bonus day at Goldman Sachs last week was a “bloodbath,” one mid-level employee told CNBC, as some workers learned they would be taking home smaller bonuses this year — and some none at all. In addition, the firm cut the pay of some if its senior workers in half.
Investment bankers at Bank of America also found out earlier this week that their compensation would be slashed by 25 percent. That’s part of a larger push to cut total costs at America’s second-largest bank by as much as $8 billion per year.