Wall Street powerhouse Morgan Stanley said it would pay a smaller portion of revenue in bonuses to investment bankers and traders this year even in a better revenue environment.
The bank reported a drop in fourth-quarter adjusted earnings on Tuesday as it cleared the decks for a more disciplined approach to compensation by deferring fewer bonus payouts.
In the past, the bank has deferred up to 80 percent of its bonuses at times of market uncertainty.
The bank said in December it would pay more bonuses upfront because it was on a stronger financial footing and in a better position to make its practices more in line with those of rivals.
Morgan Stanley said it would pay 39 percent or less of revenue from its institutional securities business to employees in 2015. Chief Executive James Gorman said in June the ratio would be 40 percent or less.
The bank's adjusted earnings fell short of estimates, mainly due to the jump in bonus payments and unexpected market swings that hit its division that trades bonds, currencies and commodities.