Morgan Stanley Chairman John Mack said on Tuesday that investment bankers are overpaid and Wall Street compensation won’t fall much because firms don’t want to lose their best performers.

Mack, a native of North Carolina, was speaking at a 30th anniversary event at the McColl School of Business at Queen's University in Charlotte, which is named after longtime Bank of America chairman Hugh McColl who is now 74 years old.

John Mack told students that at a recent meeting with President Obama, the banking industry’s top CEOs were explaining the changes they’d made in bonuses, such as awarding a larger percentage in stock and adding clawbacks. When it was Mack’s turn to speak, he said: “Mr. President, I agree with everything these guys said. But the issue is not structure, it is amount.”

But for payouts to get smaller, all the banks need to get on board, Mack said. Otherwise, the bank that starts cutting bonuses will lose its talent to the other, higher-paying firms

Mack, who retired as CEO of the world’s biggest brokerage last December, cited a 28-year-old Morgan Stanley trader whose unit had earned $300 million to $400 million for the firm. After Morgan Stanley offered $11 million in compensation, the trader moved to a hedge fund that paid him $25 million, Mack said.

John Mack said he understands why people are mad at bankers, and he thinks it will stay that way until the economy gets back to normal. It’s a point that he made to his friend Lloyd Blankfein, the CEO of Goldman Sachs, after Blankfein called him to complain about a meeting with government leaders.

“If you’ve lost your job, you’ve lost your house, it’s pretty easy to dislike bankers,” Mack said.

“It’s real easy to dislike investment bankers,” Hugh McColl added.

Mack hasn’t taken a bonus for the past three years and received a salary of $800,000 last year but Morgan Stanley paid out 62% of revenues in employee compensation.

Wall Street bonuses exceeded $20bn last year, rising 17% from 2008, as US banks emerged from their worst downturn in decades.

Banking profits are likely to have exceeded $55bn, almost three times the previous record, as shares rallied and debt markets reopened, according to a report by Thomas DiNapoli, New York State's comptroller.

The average taxable bonus had risen to $123,850, the report showed.

The Wall Street Journal reports Morgan Stanley Smith Barney promised top brokers 75% of certain fees and commissions generated in 2008 as part of the pay plan agreed to by both companies as a way of enticing top brokers to stay after the merger.

Retention bonuses are separate from signing bonuses routinely paid to lure away top brokers. In 2009, about 4,000 registered brokers at large firms moved to rivals, according to Discovery, a research firm.

The Journal says Credit Suisse paid an estimated $20m in 2008 to Citigroup broker Richard Zinman, according to people familiar with the situation.