The former investment banks are delaying decisions about year-end bonuses until it's clearer how the economy will shake out.
Morgan Stanley (MS) and Goldman Sachs (GS) are converting to regulated retail banks and have delayed the October meetings on bonuses, the Financial Times reports.
Managers have warned that the bonus pools will be smaller and top performers will receive most of the money.
Goldman Sachs says its compensation costs were down 32% in the first 9 months, generally due to smaller bonus pools. Morgan Stanley says its compensation expenses fell 20%. Credit Suisse (CS) said compensation costs fell 43% and UBS (UBS) said first half compensation costs were down 50% for its investment bank.
Delays in determining the size of the bonus pools are playing out against regulatory and investor concern that compensation plans encouraged undue risk.
The FT says much of this year's bonuses are likely to be paid in restricted shares as banks seek to retain cash in the economic downturn.
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