[ by Howard Haykin ]

Morgan Stanley will offer a one-time cash bonus to several thousand support personnel at its Morgan Stanley Smith Barney brokerage to compensate them for extra work on a difficult technology conversion, according to people familiar with the situation.  The announcement comes just a few days after Morgan Stanley completed the $1.9 billion acquisition of 14% of the brokerage venture from Citigroup, which raised its stake in the business to 65%. 

The bonuses, to be paid in October, reportedly range from $1,500 for client-service associates to $5,000 for service managers.  The firm's total cost for all bonuses was not reported.  

In part, the bonuses reflect the manpower that the firm has allocated to fix technical problems - addressing issues ranging from systems crashes to onerous money-transfer processes.  Yet, the bonuses aren't solely related to employees' work on technology fixes.  Support staff had to learn new procedures related to client website access, among other tasks. 

Another key element of the bonus plan is that it "has to be a morale issue," according to one MSSB broker, who pointing to staff frustration at the technology problems and the difficulties of adopting new procedures.

In recent weeks, the securities firm's top brokerage executives, including Morgan Stanley Smith Barney President Gregory Fleming, have waged a campaign to keep disgruntled, high-performing brokers at the firm.  Mr. Fleming, who recently went on a tour of roughly 20 branches, last week met with roughly 40 top producers in the institutional consulting unit who were threatening to bolt. The company pledged to fix persistent technology issues on specific timetables, people familiar with the meetings said.

For further details, go to:  [WSJournal, 9/21/12].