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Shareholders to be Paying Morgan Stanley Bonus-Deferral Plan for Years to Come

Morgan Stanley shareholders could have to pay for deferred bonus for a few mor

A corporate accounting decision may end up putting a greater financial burden on shareholders for one major financial institution.

Bloomberg reports that Morgan Stanley has rolled out a deferred bonus plan that will

A corporate accounting decision may end up putting a greater financial burden on shareholders for one major financial institution.

Bloomberg reports that Morgan Stanley has rolled out a deferred bonus plan that will allow it to reduce last year's pay packages for some of its traders and investment bankers, delaying approximately 75 percent of the payouts and thus making its books look much better. According to the Federal Reserve and other regulators, the tactic is meant to deter risk-taking now that would immediately drive up employees' profits but would have long-term negative consequences.

"Wall Street firms are under pressure from lawmakers and regulators to defer more pay after upfront bonuses were blamed for fueling the financial crisis," the source explains. Yet Bloomberg reports that there is a new threat, that "firms in lean times will promise packages that are hard to afford when the bill comes due."

As the Financial Times reports, the deferral would mean that bonuses paid out this year would have a $125,000 ceiling. About half of the payouts will come in December 2012, the newspaper says, and the rest will be distributed in late 2013.