What you hear from bankers to justify their enormous profits is that they must be obscenely overpaid to ensure the retaining of key talent in the organization. It’s worth pointing out that their own bosses think that’s garbage.

The chief executive of the US investment bank Morgan Stanley has said Wall Street pay is still “way too high” and remuneration and jobs will have to be sacrificed to boost shareholder returns.

The comments by James Gorman, who took over the running of the bank in 2010, set him apart from longer standing peers who have always defended high pay as necessary for retaining key staff.

But Gorman told the Financial Times: “Compensation is way too high. As a shareholder I’m sort of sympathetic to the shareholder view that the industry is still overpaid.”

This is actually related to job cuts at the major banks. Morgan Stanley plans to reduce its workforce by 7% by the end of the year, with more, including pay cuts, possible next year. Other banks, particularly in Europe, plan to follow suit.

At one level this just represents shareholders asking for higher profits and dividends at the expense of those who do the work. And in the end, it really does matter where these pay cuts get located, at the lower or higher levels. But runaway compensation really was a problem in the bubble years of high finance. It led to corner-cutting and unethical choices in the race for career advancement. Banking ought to be boring, and lower salaries certainly help with that.

I don’t know if I really buy whether lower leverage and proprietary trading and public outcry has dropped bank profits to this point. In fact, the biggest banks, made all the bigger by consolidation, had their greatest calendar-year profits since 2006 over the last 12 months. Increased profit per mortgage is one of the big reasons why. So we’ll have to see how this transpires.

But reducing bonus and compensation culture is a decent enough goal. Hopefully that extends to the top of the corporate ladder.