Morgan Stanley said average compensation increased 4% last year to $264,990 per employee and it completed its plan to cut 1,600 jobs.
On a conference call reporting on the bank's fourth quarter earnings, Chief Executive James Gorman said the bank expects to incur $150 million in severance expenses next quarter due to the "recently-completed reduction program." The program cut jobs across all levels and business lines.
Morgan Stanley said year-end employment stood at 61,899. A spokeswoman declined to say whether more job eliminations will take place this year. The bank also declined to comment on reports that payment of cash bonuses above $125,000 earned in 2011 will be deferred until next year or the end of this year.
Chief Financial Officer Ruth Porat said that the bank has focused on the pace of economic recovery, which continues to be slow. "We thought it would be appropriate to reduce headcount," she said.
The bank has hired in certain areas including interest-rate research and trading, she said. "We focused on striking the right balance between reducing headcount where we could and positioning the firm for recovery," she added.
For the fourth quarter, the firm reported a loss of $227 million, compared to a profit of $871 million a year earlier. The company's loss of 15 cents a share beat analyst expectations for a loss of 57 cents a share.
For 2011, the firm reported earnings of $4.2 billion, or $1.26 per share, down from $4.5 billion or $2.45 a share a year earlier.
Write to Julie Steinberg at Julie.Steinberg@dowjones.com