As the recession grinds on, the phrase "Wall Street bonuses" has become something of a dirty word that calls up images of greedy bankers walking away with plenty of loot while the deals they facilitated fall apart. But in an ironic "blue collar vs. white collar" twist, a union, the American Federation of State, County and Municipal Employees, or AFSCME, is calling for investment bank Morgan Stanley (NYSE:MS) to roll back salary increases for senior executives and other top earners and go back to compensating them primarily through bonuses.
In a letter to the bank, which was obtained by the Wall Street Journal, Gerald McEntee, international president of the AFSCME, urged the move, writing: "[The raises] weakened the link between top executive pay and performance. We urge you to return base salaries to their previous levels and ... reward executives for long-term value creation, not just showing up for work."
Last month Morgan Stanley increased the base salaries of top management to "to move away from a compensation program focused largely on annual incentive," according to an SEC filing.
AFSCME, which holds 3% of Morgan Stanley's stock, isn't known for holding its tongue when it comes to management or compensation. AFSCME's director of corporate governance and pension interest Rich Ferlauto has been a
critic of Citigroup Inc.'s (NYSE:C) CEO Vikram Pandit. Citi is also in the process of increasing base salaries as TARP restrictions put a cap on bonus money, a move that has touched off more
political heat for the bank. -
George White See WSJ story (subscription required)
See Dealscape post on AFSCME's criticism of PanditSee Dealscape post on Wall Street's reputationSee Dealscape post on Citi's raises
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