Citi and Morgan Stanley issuing additional shares to pay its employees

The Wall Street Journal says Citigroup Inc and Morgan Stanley are going to make announcements of their plans on authorization or repurposing of their shares in the next few weeks. The plans are projected to be aimed at insuring availability of enough stock for employee compensation, while the shares’ prices of the companies are decreasing.

The paper sited two people familiar with the matter, who said Citigroup, which had announced a capital restructuring last month, would ask its shareholders to increase the amount of its authorized shares to 40 billion shares or more, from the current 15 billion shares. Moreover, it has been disclosed that the company is requesting the increase mainly to pay out equity-based compensation.

On the other hand, the journal stated, Morgan Stanley might need to use a larger portion of its current authorized shares for bonus payments.

The shares of Citigroup had closed at $3.08 on Wednesday, which is the highest closing rate since February 13, while of Morgan Stanley closed at $24.19.