Morgan Stanley to pay bankers more up front

It's the best time to be a Morgan Stanley banker in years.

James Gorman's bank is paying its workers more up front as it seeks to bring compensation in line with competitors.

Morgan Stanley lowered the portion of bonuses it will defer to 50 percent, down from a peak of 100 percent in 2012.

That's still high relative to rivals, CEO Gorman said during a conference call Tuesday to discuss fourth-quarter results. But, he added, "it continues to tie our employees to the firm."

Last year, the bank set aside more than $5 billion for compensation and benefits, or an average of $91,500 per employee. That's up from about $71,500 during the last three months of 2013.

While that's a 28 percent jump, it's still chump change compared to the $373,000 per-employee average for Goldman Sachs, which reported quarterly results last week.

Like Goldman and other big banks, Morgan Stanley's quarterly results fell short of forecasts after it was hit by a year-end trading slump.

Net income rose to $1.04 billion, or 47 cents a share, from $84 million, or 2 cents, a year earlier.

Excluding one-time items, per-share profit was 39 cents a share, compared with analysts' estimate of 48 cents a share, according to Thomson Reuters.

The disappointing results reflected the difficult trading environment in bonds, Gorman said during the call. Fixed-income trading dropped 28 percent during to $294 million.

"Fixed income and commodity sales and trading were clearly not immune to the unfavorable trading environment," Gorman said.

A bright spot for the company was the more than $2 trillion in client assets for its wealth management business — an area that Gorman has grown during his tenure.

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