Morgan Stanley set aside a smaller share of revenue to pay employees at its investment-banking and trading division.
Bloomberg News reports that compensation for staff at the institutional securities unit fell 2.2% to $6.82bon for 2013.
Salaries, bonuses and previous deferred awards equalled 42% of adjusted revenue, down from 45% a year earlier.
Companywide compensation and benefits rose 4.2% to $16.3bn in 2013.
Fourth-quarter net income fell to $181m from $594m.
The charge forced the bank’s institutional securities unit, which houses mortgage lending and trading operations, to report a $1.1bn pretax loss.
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