James Gorman, CEO of Morgan Stanley, made a speech recently where he crticized the "hero" culture that runs rampant among institutional traders and investment bankers. (Not to worry; he wasn't criticizing the ridiculous recruiting packages doled out to retail financial advisors. Oh, and rumors that the SEC would use Dodd-Frank legislation as an excuse to regulate broker bonuses turned out to be not true.)
Today's New York Post reports that, "On Wall Street, the era of hero bankers may be coming to a close. . . . Gorman plans on playing 'hardball' with bonuses this year and is bracing to have some 'difficult conversations' with bankers about scaling back their fat-cat bonuses, and perhaps their egos as well, according to people familiar with his plans."
The idea of hero traders and bankers leads to outsized risk taking, some say. According to Gorman, the Post says, "Creating a compensation system that better aligns or balances shareholders' interests and the broader society's interests with the individual's interests, and changing the perception that it's the individual that's the 'hero' is the best way to change Wall Street."
Gorman made $15.1 million in salary and bonus last year.