Morgan Stanley has instituted a new stipulation on bonuses for this year. A new "claw-back provision" aims to tie compensation to the bank's long-term performance versus short-term gains.
The firm said it will hold back part of employee bonuses for three years during which time the claw-back provision will be put into play - if the employee's bets on the market go down there is potential for part of the money not to be paid.
Morgan Stanley also announced that its top executives, including CEO John Mack and co-presidents James Gorman and Walid Chammah, would not be receiving bonuses this year.
Senior executives at Merrill Lynch will also forego their bonuses for the year according to reports.
For more on Morgan Stanley's new bonus structure and what other firms are doing in tough times check out the New York Times article.