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FBN’s Charlie Gasparino on Bank of America CEO Brian Moynihan nixing the proposal by Merrill Lynch’s John Theil to cut bonuses for brokers.
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-- -- Today and house this for Christmas present bank up America's Merrill Lynch brokerage unit looking to save money by cutting broker compensation different that before.
But not -- CEO Brian morning Hannah has his way Charlie Gasparino on the CEO -- the lake city.
We -- when events.
It is pretty unusual to be cutting -- conversation that generally doesn't happens typically now there's a lot of competition for brokers so firms that -- -- but here's what we know recently inside Merrill Lynch's.
Brokerage Obama run by a guy named John -- this used to be the biggest brokerage apartment in the world -- Stanley as -- -- that given the Smith Barney.
Acquisition but it still considered Merrill -- is still considered the premiere brokerage -- brokers department.
On Wall Street John feel recently in an effort to save money -- every Wall Street -- is saving.
So looking to cut cause he came in and it's a -- pretty unusual.
He put out a new grade a propose a new grid that would drastically east reduce broker compensation.
His agency think everybody.
-- the did the rumor on Wall Street for years now.
Is that Brian Moran and hated the brokers write the CEO Bank of America -- -- Merrill Lynch unit hedging by his predecessor -- Ken Lewis.
But charter brokerage unit.
There's lots of talk.
Blew out Sally -- -- so we can essentially.
Remembered Sally went to to keep the broker compensation -- so you can basically put brokers on some sort of salary and the other thing something that they would really hate anyway.
It looks like it's not even -- He came to their defense and -- -- agency sort of -- morning came in and mixed the proposal from from John appeal to -- address we wrote lower broker compensation what did he do that.
Well in his words according people with them.
Direct knowledge of the situation.
Is that he wants to continue to probe pope's brokers for Morgan Stanley hi has its own problems as you know Morgan Stanley's technology problems.
These brokers -- brokers teams are leaving Morgan Stanley because of that.
So in order -- sort of capitalize on that.
Morning McCain to rescue said no they put out a new grade through the late last at least until -- artists are safe -- out.
The payment rate this is something different brokers and -- paid bonuses -- they may get some bonuses for what they're paid is on commissions and production.
And has agreed to tell you how much of that money that you produce so you wanna buy stock how what percentage of that -- -- keep.
That brokerage gravy is basically the same as was last year.
Is not been drastically -- and it's not -- reload this time Chris bright morning and it basically says you can't do it particularly as we hearing.
Another essentially at war I -- it is one of the biggest behind the scenes battles on Wall Street is the battle to poach brokers now why does anybody care out there well.
I do cover the weeds of Wall Street its interest in lot of reviewers work almost but only that.
Remember your broker can switch firms at any time you have a broker Merrill may go to Morgan this is some of the things that are going -- But now these guys out there might look and say well at least Merrill is keeping that -- structure in place I mean -- -- but their their compensation structure that may lure some top talent derelict and -- in that would hurt Morgan -- -- particularly if you're a stockholder Morgan Stanley would you worried about.
James Gorman the CEOs made it pretty clear their business model is based on the brokers producing more becoming a bigger part of -- -- Not taken too much for -- brokers dealing with small investors if those brokers are leaving to Merrill Lynch and other places.
And this is one reason why they might that brokerage greed is going to be the same for awhile well guess what that's gonna hurt Morgan Stanley stock price we take a look at those.
Put -- both pretty ugly stuff although I'd certainly -- they've been great performers problem.
I would Tiffany for recently did a great performs a new -- -- -- will start at 2012 that was when everybody don't don't look good look at the in the.
Can you look at that a little closer.
OK let's sit -- August.
That's when we had the right right yeah but -- since January to April that was a nice run up to -- -- but it came back down again -- as you remember the days Charlie we're down at the New York Stock Exchange.
Companies like Harry -- used to set up pop up stores so that these guys could get their bonuses and literally walk.
Right to the pop up stores on the floor action like you actually don't remember that that was in 1998.
And 99.
The heyday really it.
That was well they hate the other broker was the floor broker you're talking about then get those guys I believe that was later -- Let me gathering of over 99 was right before -- -- don't have the New York Stock Exchange.
Charlie Gasparino.
Business exclusive keeping compensation -- place at Merrill thanks to prime -- him.
Brokerage compensation corporate compensation -- everybody else get -- this you start.
But at a.
