The rank and file at Morgan Stanley Investment Managers does not seem to be too content. So many staffers in the investment management unit have jumped ship that the firm's bottomline slipped by $500 million, reports Barron's.

The paper said Morgan Stanley's paid $1.87 billion in compensation and benefits expenses in the second quarter. A very steep fall from the $2.34 billion it paid during the same period in 2001. The first quarter typically includes bonus-related expenses.

Of course, the fall in pay may not be entirely good news if you are a client of Morgan Stanley (though it may be good news if you are a rival money manager looking to hire help). Lehman Brothers bank analyst Mark Constant now worries about a "recent spike in employee dissension (and departures) following recent efforts to 'integrate' Morgan Stanley's historically decentralized operations, and restructured compensation schemes," says Barron's. The root cause of the dissension (and perhaps of the savings) is a change in the way employees of the asset management arms are compensated. Morgan Stanley has tied the pay in its four units --Morgan Stanley Asset Management, Miller Anderson Sherrard, Dean Witter Intercapital and Van Kampen/American Capital Management -- together. So, rather than pay being based on how a staffers' unit did, pay is based on results at the combined level. 

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE