Morgan Stanley is focusing on cost-cutting, including the possibility of more staff reductions, to improve shareholder returns, two top executives said on a conference call Thursday.

The investment bank paid out 52 percent of adjusted net revenue to employees in the third quarter, down from 55 percent in the second quarter, and staff levels declined by 2 percent.

In its trading and investment banking division, where Chief Executive James Gorman has been particularly focused on compensation costs, the ratio of compensation to adjusted net revenue fell to 45 percent from 49 percent.

However, overall, Morgan Stanley reported an 11 percent rise in noninterest expenses, partly because of higher litigation costs and one-time items related to its ongoing acquisition of a brokerage business from Citigroup Inc.

Gorman and Chief Financial Officer Ruth Porat said they are focused on reducing those costs and are examining employee pay, staff levels and noncompensation items in order to boost return on equity to higher levels.

"It is not a terribly heroic assumption to get back to your cost of capital," Gorman said.