Google and Facebook generate more than $1 million of revenue per employee, quite comparable to Goldman and substantially above Morgan Stanley. The money is there, at least in tech, just more of it goes to shareholders and less to compensating employees.
Why do banks pay out so much more of their revenues out in compensation? Because investment banks are service businesses and not product businesses. Their product is their professionals, and they create brand by composing entry level classes mostly with Harvard, Yale, Princeton, Wharton, and Columbia graduates. They place tremendous weight on this criterion. Other industries, say tech companies, are much more willing to hire from the top public schools, people with foreign degrees, or even people with no degree.
