Big banks really had little choice but to defer compensation to some degree for 2011. The disappointment felt by employees was acute, but these are hardly good times. Management had to do something. But no good deed goes unpunished.

In this case, the downside to such deferrals is clear: Future costs will rise. The hope of course is that banks recover and put themselves in good position to pay these added costs; that is, they hope to recover soon. But that’s something of a gamble.

Bloomberg notes that Morgan Stanley’s $16.4 billion of compensation recorded in 2011 was bloated by deferred awards from prior years and that the decision to defer more in pay earned for 2011 brings the average amount deferred pay to about 75 percent, up from 60 percent in 2010 and 40 percent in 2009. We could easily see more “bloat” in years ahead. Pay is expected to be lower than in any year since 2008.

All in all, it’s not clear that deferred cash awards are so voluminous they will pose a massive income statement issue. The deferral mechanism of choice seems to be the lagged vesting date of restricted stock, which poses fewer income statement issues. Still, the trend is one to watch. We’ll likely get a more complete picture of executive compensation of banks when companies file their full year annual statements.

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