"If I was leaving it wouldn't stop me"......sign of the times?

Morgan Stanley, Smith Barney Brokers To Get Stay Bonuses

February 20, 2009: 05:15 PM ET

NEW YORK -(Dow Jones)- Morgan Stanley (MS) plans to offer its top-producing financial advisers and those at Citigroup Inc.'s (C)Smith Barney as much as 105% of their annual production to stay with the two firms as they create a joint venture.

The retention deal was announced to branch managers at both firms a few hours after Wells Fargo & Co. (WFC) said it won't be handing out retention bonuses to the Wachovia Securities brokerage force.

A Morgan Stanley spokesman confirmed the details of the package but declined to comment further.

The package is in the form of a nine-year forgivable loan, and brokers won't receive the money until January 2010. The delay isn't typical for retention packages, but the firms want to ensure that the money is coming from future earnings from the planned Morgan Stanley Smith Barney joint venture and not from taxpayer money the firms received from the Troubled Asset Relief Program.

The firms expect the deal on the joint venture, which will have roughly 20,000 brokers, to close in June.

The package is on a sliding scale and ranges from offering brokers with $500, 000-$749,999 in production 30% of their production in cash. Brokers with $750, 000-$999,999 are eligible to receive 50% of production. Those with $1 million and more will receive 75% of their production in cash in January 2010.

The deal also offered deferred compensation that will be paid out in January 2012. The $1.75 million and up producers will receive another 30% of production. All other brokers will receive bonuses from 25%-30% of production if they are able to grow their production by 25% in the next three years.

"I think its probably a tad better than the Merrill Lynch deal and is certainly a hell of a lot better than Wachovia deal," said a Smith Barney broker in the U.S. Midwest.

"It's an okay deal, but if I was leaving it wouldn't stop me," he added.

Brokers at both Morgan Stanley and Smith Barney were nervous earlier Friday that they would share the same fate as colleagues at Wachovia Securities.

"Everyone was freaking out here. We are going to have a much better weekend now," said a Smith Barneybroker in the Southeast.

-By Brett Philbin, Dow Jones Newswires; 201-938-5393; brett.philbin@ dowjones.com

-By Annie Gasparro, Dow Jones Newswires; 201-938-5174; annie.gasparro@ dowjones.com

  (END) Dow Jones Newswires   02-20-09 1715ET   Copyright (c) 2009 Dow Jones & Company, Inc.