The deal also offers deferred compensation that will be paid out in January 2012, giving the $1.75 million-and-up producers another 30% of their production. All other brokers will receive additional bonuses from 25% to 30% of production in January 2012 if they are able to increase their production by 25% by then.
In most mergers and acquisitions that include retention packages, checks are handed out to the brokers right after the deal closes. But Morgan Stanley waited until the joint venture had been complete for six months.
The firm said the delay was an effort to ensure that the retention money, which was originally said to reach as much as $3 billion, comes from the earnings of the Morgan Stanley Smith Barney joint venture and not from taxpayer money the firms received from the government's Troubled Asset Relief Program.
Copyright (c) 2010, Dow Jones. For more information about Dow Jones' services for advisors, please click here.