http://www.bloomberg.com/apps/news?pid=20601087&sid=aJ1zYLJvyctI&refer=home The key sentence here is ``Fuld is preparing his guys for what's coming for them. He's setting an example because the troops will also get shrunk bonuses.'' Lehman's Fuld, McDade to Forgo Their 2008 Bonuses, People Say By Yalman Onaran June 27 (Bloomberg) -- Lehman Brothers Holdings Inc. Chief Executive Officer... [more]
http://www.bloomberg.com/apps/news?pid=20601087&sid=aJ1zYLJvyctI&refer=home
The key sentence here is ``Fuld is preparing his guys for what's coming for them. He's setting an example because the troops will also get shrunk bonuses.''
Lehman's Fuld, McDade to Forgo Their 2008 Bonuses, People Say
By Yalman Onaran
June 27 (Bloomberg) -- Lehman Brothers Holdings Inc. Chief Executive Officer Richard Fuld and President Herbert ``Bart'' McDade will forgo 2008 bonuses, the biggest chunk of their pay, after the fourth-biggest U.S. securities firm reported its first quarterly loss since going public.
Fuld and McDade told managing directors of their decision earlier this week, said two people with knowledge of the matter, who declined to be more specific because the discussions were private. Lehman slumped 70 percent in New York Stock Exchange composite trading during the past 12 months, the second-worst performance in the 11-member Amex Securities Broker/Dealer Index after E*Trade Financial Corp.
Fuld, 62, was paid $40 million last year when New York-based Lehman posted record earnings, and about 98 percent of his compensation was in a bonus. By contrast, John Mack, Morgan Stanley's CEO, received only a salary of $800,000 last year after earnings at the second-largest U.S. securities firm by market value plunged 57 percent and all the members of Bear Stearns Cos.'s executive committee gave up their bonuses.
``I'd be surprised if other CEOs didn't give up their bonuses this year again,'' said Jeanne Branthover, head of the financial-services practice for Boyden Global Executive Search in New York. ``Fuld is preparing his guys for what's coming for them. He's setting an example because the troops will also get shrunk bonuses.''
Lehman fell $2.08, or 8.4 percent, to $22.61 in composite trading on the New York Stock Exchange yesterday.
Mounting Losses
Fuld promoted 49-year-old McDade to president earlier this month to help shore up investor confidence about the firm's prospects. McDade, the former head of equities who had also supervised fixed income, will work with Fuld to rebuild Lehman after mortgage-related writedowns led to the $2.8 billion second- quarter loss, the first loss since the company was spun off from American Express Co. in 1994. His pay and bonus weren't itemized last year in Lehman's corporate filings.
McDade has brought back two former associates, Michael Gelband and Alex Kirk, giving them expanded roles. Gelband, 49, who was ousted last year as head of fixed income, was named chief of the firm's capital markets businesses, a new post that encompasses equities and fixed income. Kirk, 48, who left in February as head of credit products, was picked to oversee Lehman's investments.
Lehman may report a loss of more than $700 million in fiscal 2008 after earnings rose 5 percent last year to $4.2 billion as so-called hedges on its mortgage holdings staved off losses, according to a survey of 18 analysts by Bloomberg. Losses at Lehman surged in the second quarter when the hedges didn't work.
Fuld's 2007 compensation included a $4.3 million cash bonus, $35 million in restricted stock and $750,000 in salary. He got $40.5 million in 2006.
[less]
Response by iMom
almost 18 years ago
Posts: 279
Member since: Feb 2008
On the bright side, if bonuses are going to be paid out, most of it will be in the form of company stock. Given the decline in financials this year, that means employees will be getting their stock at attractive levels.
Ignored comment.
Unhide
Response by walterh7
almost 18 years ago
Posts: 383
Member since: Dec 2006
"On the bright side, if bonuses are going to be paid out, most of it will be in the form of company stock. Given the decline in financials this year, that means employees will be getting their stock at attractive levels."
Just like those Bear Stearns employees. :) But seriously, it will take 2-4 years for the brokerage industry to 'repair' itself.
Ignored comment.
Unhide
Response by randomguy
almost 18 years ago
Posts: 7
Member since: Apr 2007
"Given the decline in financials this year, that means employees will be getting their stock at attractive levels."
If Lehman stock is at an attractive level to you, you must be brilliant. To me its entirely unattractive.
Ignored comment.
Unhide
Response by iMom
almost 18 years ago
Posts: 279
Member since: Feb 2008
Randomguy: Well of course LEH isn't attractive to me.....but in general, if you MUST accept company stock as compensation, you would rather receive it at a lower-price rather than a higher price. My point was that most of the bonuses paid out at the end of the year (if any) will likely be in the form of restricted stock, not cash.
Ignored comment.
Unhide
Response by randomguy
almost 18 years ago
Posts: 7
Member since: Apr 2007
"you would rather receive it at a lower-price rather than a higher price. My point was that most of the bonuses paid out at the end of the year (if any) will likely be in the form of restricted stock, not cash."
As the other poster astutely pointed out, Bear employees received 2007 bonuses in equity and look where it got them. Lehman may in fact be the next shoe to plummet. It is not with joy that I make that statement. Stock bonuses in the current environment are the equivalent of being paid in human shit.
Ignored comment.
Unhide
Response by iMom
almost 18 years ago
Posts: 279
Member since: Feb 2008
Can't really disagree with you.
Ignored comment.
Unhide
Response by randomguy
almost 18 years ago
Posts: 7
Member since: Apr 2007
The financials torched themselves letting these little fuckers sell crap paper to the street. these ibanks are overrun with junior people running deals. its a real problem. no oversight. look what its caused.
Ignored comment.
Unhide
Response by iMom
almost 18 years ago
Posts: 279
Member since: Feb 2008
UPDATE VIA THE WALL STREET JOURNAL
Lehman Employees to Get Shares
By SUSANNE CRAIG
July 2, 2008 4:29 p.m.
Lehman Brothers Holdings Inc., in a move to reward employees who are sticking with the investment bank as it fights to steady itself, is awarding midyear stock bonuses to employees.
The move is an attempt by Lehman to take advantage of its low stock price, which has recently dipped to levels it hasn't seen since 2000. Employees are typically paid a combination of cash and stock. Because of Lehman's low share price, the award will put even more shares into the hands of employees, who already own about 30% of the firm.
Terms of the awards call for Lehman employees to get the equivalent of 20% of the stock award they received in 2007 as a down payment for their 2008 compensation. They will get the rest of their 2008 compensation, comprised of cash and stock, next January.
Lehman's stock awards will not dilute current shareholders because the shares being handed out already have been accounted for by the firm.
The shares will vest over a three-year period, with one-third vesting each year. That is a shorter vesting period than previously offered by Lehman, but in line with Lehman's competitors. Also, unlike most Lehman employee stock offers, this one does not come at a discount to the stock's market price.
On the bright side, if bonuses are going to be paid out, most of it will be in the form of company stock. Given the decline in financials this year, that means employees will be getting their stock at attractive levels.
"On the bright side, if bonuses are going to be paid out, most of it will be in the form of company stock. Given the decline in financials this year, that means employees will be getting their stock at attractive levels."
Just like those Bear Stearns employees. :) But seriously, it will take 2-4 years for the brokerage industry to 'repair' itself.
"Given the decline in financials this year, that means employees will be getting their stock at attractive levels."
If Lehman stock is at an attractive level to you, you must be brilliant. To me its entirely unattractive.
Randomguy: Well of course LEH isn't attractive to me.....but in general, if you MUST accept company stock as compensation, you would rather receive it at a lower-price rather than a higher price. My point was that most of the bonuses paid out at the end of the year (if any) will likely be in the form of restricted stock, not cash.
"you would rather receive it at a lower-price rather than a higher price. My point was that most of the bonuses paid out at the end of the year (if any) will likely be in the form of restricted stock, not cash."
As the other poster astutely pointed out, Bear employees received 2007 bonuses in equity and look where it got them. Lehman may in fact be the next shoe to plummet. It is not with joy that I make that statement. Stock bonuses in the current environment are the equivalent of being paid in human shit.
Can't really disagree with you.
The financials torched themselves letting these little fuckers sell crap paper to the street. these ibanks are overrun with junior people running deals. its a real problem. no oversight. look what its caused.
UPDATE VIA THE WALL STREET JOURNAL
Lehman Employees to Get Shares
By SUSANNE CRAIG
July 2, 2008 4:29 p.m.
Lehman Brothers Holdings Inc., in a move to reward employees who are sticking with the investment bank as it fights to steady itself, is awarding midyear stock bonuses to employees.
The move is an attempt by Lehman to take advantage of its low stock price, which has recently dipped to levels it hasn't seen since 2000. Employees are typically paid a combination of cash and stock. Because of Lehman's low share price, the award will put even more shares into the hands of employees, who already own about 30% of the firm.
Terms of the awards call for Lehman employees to get the equivalent of 20% of the stock award they received in 2007 as a down payment for their 2008 compensation. They will get the rest of their 2008 compensation, comprised of cash and stock, next January.
Lehman's stock awards will not dilute current shareholders because the shares being handed out already have been accounted for by the firm.
The shares will vest over a three-year period, with one-third vesting each year. That is a shorter vesting period than previously offered by Lehman, but in line with Lehman's competitors. Also, unlike most Lehman employee stock offers, this one does not come at a discount to the stock's market price.