Morgan Stanley will pay cash bonuses to branch support employees at its Morgan Stanley Smith Barney unit who worked extra hours to remedy disruptions caused by a new computer system, a person briefed on the decision said.
The one-time payouts range from $1,500 to $5,000 for thousands of the brokerage's workers, said the person, who asked not to be identified because the payments weren't publicly announced. Dow Jones reported the plan yesterday.
Greg Fleming, president of the venture with Citigroup Inc. met with financial advisers across the U.S. earlier this month to discuss the disruptions and assured them that the company is working to make improvements. Some brokers complained the new system, meant to integrate Morgan Stanley and Smith Barney advisers, made enrolling new clients more cumbersome, spokesman Jim Wiggins said earlier this month.
Morgan Stanley owns 65% of the brokerage after agreeing to purchase an additional 14% stake from Citigroup this month for $1.89 billion and has agreed to buy the rest by June 2015. Morgan Stanley finished integrating its brokerage unit with Smith Barney in July.
Chief Financial Officer Ruth Porat said last week that the firm will book a one-time charge this quarter related to the integration as the firm writes off old software and closes some regional support centers.