(Reuters) - Morgan Stanley and Citigroup are looking at setting aside between $2 billion (1.3 billion pounds) and $3 billion for bonuses to keep top staff at the joint brokerage venture they are likely to announce, the New York Post reported.
The bonuses would be paid out over nine years, it said.
Citigroup and Morgan Stanley are likely to announce a joint venture for their retail brokerage businesses next week, a person familiar with the deal told Reuters Monday.
Citigroup is essentially selling its Smith Barney business to Morgan Stanley over time. The joint venture will be 51 percent owned by Morgan Stanley, the person said.
The Post, citing a person familiar with the situation, said the bulk of payouts would go to brokers at Smith Barney, whose roughly 19,000-person army is expected to account for the lion’s share of the combined entity.
The two banks have identified nearly 2,100 Smith Barney and more than 900 Morgan Stanley top-tier brokers, with the top producers within that category contributing $1 million and $2 million each to the combined firm’s bottom line, it said.
Details on specific packages for specific brokers also are still being discussed, it added.
Citigroup and Morgan Stanley could not be reached immediately by Reuters.
Reporting by Ratul Ray Chaudhuri in Bangalore; Editing by David Cowell
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