Morgan Stanley to Give $1,000 Bonus to Lower-Tier Employees
Morgan Stanley has joined the growing list of companies that is sharing some of its wealth with employees through a special bonus but, unlike them, it is avoiding broadcasting its largesse at a politically sensitive time.
Bank of America, AT&T, Walmart, Wells Fargo and other big companies have attributed one-time gifts they recently announced to employees to expected benefits they will receive from the newly passed Republican-supported tax law. Some critics have suggested that big business may have ponied up quickly after passage of the bill on December 20 to curry favor with the Trump Administration.
In an e-mail sent on Thursday, Morgan Stanley CEO James Gorman and President Colm Kelleher told U.S. employees who earned less than $150,000 in 2017 that will receive bonuses of $1,000, said people who read parts of the message to AdvisorHub, and also committed to contributing another $20 million annually to the Morgan Stanley Foundation.
The message conspicuously left out any reference to the new tax law that cuts the top corporate rate from 35% to 22% and permits companies to repatriate overseas cash at discount rates. The Morgan Stanley bonuses are based on the company’s 2017 performance and not tax reform, said a person familiar with the decision.
A company spokeswoman confirmed the $1,000 bonuses but declined to discuss the reasons for the one-time gifts or to say whether supplementary bonuses have awarded in the past to commemorate a strong earnings year. (Morgan Stanley is reporting its fourth-quarter results on Wednesday.)
Gorman, like Goldman Sachs CEO Lloyd Blankfein and J.P. Morgan CEO Jamie Dimon, among other Wall Street honchos, has had Democratic Party leanings. He has contributed to the campaigns of Hilary Clinton and other national candidates, according to OpenSecrets.org. Tom Nides, a Morgan Stanley vice chairman, has a long history as an adviser to Democratic administrations and was a deputy secretary in the State Department under President Obama in 2011 and 2012.
Morgan Stanley executives historically, to be sure, have been contributors to both political parties, and company employees supported both Donald Trump and Clinton in the 2016 election. However, their more than $630,000 of contributions to Clinton and the Democratic National Committee were more than double employees’ donations to the campaigns of Trump and other Republican presidential contenders, according to OpenSecrets.
Stifel Financial Corp., one of the few broker-dealer holding companies to have announced special bonuses, said two days before Christmas that its gifts of $1,500 to thousands of non-advisor employees reflect their hard work “as well as the positive environment that we anticipate the tax legislation passed this week by Congress will create for Stifel.”
Morgan Stanley’s email said that financial advisors and portfolio managers are not eligible for the bonus, but did not discuss whether any employees with those jobs make less than $150,000, said people who read it. The bonus amount will be modified for people working outside the U.S., based on location and currency rates.
Morgan Stanley earlier this week said it would take a one-time $1.25 billion hit to fourth-quarter earnings due to a special provision it is taking as a result of remeasuring some deferred tax benefits due to the new tax law. The spokeswoman did not say how many people will receive the company’s $1,000 bonuses.