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Banker Pay Still Killing Shareholders (Update 1)

Even so, Goldman and Morgan Stanley may only be putting off their problems for future years, as Lazard's fourth quarter difficulties demonstrate.

Not so, says Morgan Stanley's Gorman, who addressed the issue on the fourth quarter earnings call, saying "2011 represented a high water-mark for our deferrals due to the unusual aggregation of prior periods into this year." He went on to say the bank is acutely aware of the impact of deferral decisions on future periods, but with the last years behind us, we will have more flexibility in the years to come."

Deferred compensation is also worth watching for Bank of America (BAC), JPMorgan Chase (JPM) and Citigroup (C), though because the investment banking operations are housed in larger institutions the potential drag on earnings isn't as great.

Bank of America and Citigroup both paid roughly 35% of revenues to employees in the third and fourth quarters, according to Kotowski's research.

Bank of America is also reported to have capped bonuses or possibly even done away with them entirely. The bank has declined to comment on the matter.

Calls to spokespeople for Jefferies and Evercore and email messages sent to spokespeople at Goldman, Bank of America, Citigroup and JPMorgan were not immediately returned.

-- Written by Dan Freed in New York.

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