Morgan Stanley has reversed a years-long bonus deferral scheme for junior staff that put the bank at a disadvantage to its Wall Street rivals in the war for talent.

Morgan Stanley decided in the fourth quarter to hand employees under director level more of their bonuses for 2018 in cash than deferred payments. The change brought the staff “more in line with peers”, Jonathan Pruzan, the bank's finance chief, said on an earnings call on January 17.