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Counting Fat Cats

From Louise Story's piece in yesterday's Times about the rebound in compensation at the big banks:

Some analysts point to Morgan Stanley as an example of the compensation conundrum. The bank had a dismal quarter, losing $578 million, but still put aside $2.08 billion for compensation. That amount, though lower than the compensation at Goldman, was 68 percent of revenue. ...

In an interview, Colm Kelleher, Morgan Stanley’s chief financial officer, said the compensation set-aside was based on the bank’s full-year earnings expectations, not just the first quarter. And Morgan could drop its compensation expense only so low, he said, because much of it consists of fixed expenses, like salaries.

“The number of fat cats making loads of money is much less than you think,” he said.

Hmmm. "Much less than you think" sounds like a lot more than nothing. Strikes me as a rather large concession...

--Noam Scheiber