And I can’t say I blame them.
Fury at $2.5bn bonus for Lehman’s New York staff
By David Prosser
Monday, 22 September 2008Up to 10,000 staff at the New York office of the bankrupt investment bank Lehman Brothers will share a bonus pool set aside for them that is worth $2.5bn (£1.4bn), Barclays Bank, which is buying the business, confirmed last night.
The revelation sparked fury among the workers’ former colleagues, Lehman’s 5,000 staff based in London, who currently have no idea how long they will go on receiving even their basic salaries, let alone any bonus payments. It also prompted a renewed backlash over the compensation culture in global finance, with critics claiming that many bankers receive pay and rewards that bore no relation to the job they had done.
A spokesman for Barclays said the $2.5bn bonus pool in New York had been set aside before Lehman Brothers filed for chapter 11 bankruptcy in the United States a week ago. Barclays has agreed that the fund should continue to be ring-fenced now it has taken control of Lehman’s US business, a deal agreed by American bankruptcy courts over the weekend.
Barclays is paying $1.75bn for the US operation of Lehman and is keen to retain its best staff. It said it had made no promises to individual staff members about how much they will receive but that the bonus fund would be paid out. In addition to the $2.5bn cash pool, Barclays is also in negotiations with about 30 executives it considers to be Lehman’s best assets and plans to offer them contracts worth tens of millions of dollars. British employees of Lehman described the bonus payments as a "scandal" as they waited anxiously yesterday to see whether a deal could be struck with buyers circling the bank’s European operations.
Many of Lehman’s UK staff are particularly angry about the US payouts because it has emerged that in the days running up to the bankruptcy, some $8bn in cash was transferred out of the account of the bank’s European business into accounts at the New York head office. …
Hypothetical. I am a big guy at Barclays and want to keep lottsa smart Lehman guys-assuming I would of course want to keep these jeniuses. Investment banks dissolving all over and if not, banking departments decimating times three at a minimum. Just like the dotcom meltdown but instead of software and technical job losses- money guy jobs going to hell. So knowing a lot about markets I decide to pay everyone a lotta money to keep all these jeniuses around knowing its an employers market. Make sense to anyone out there? If Lehman does not hold onto these guys they will all go out and find new work as neurosurgeons and rheumatologists and Dicki Scruggs replacement and software engineers. All it will take is 3 to 10 years of full time night skool to qualify. And to make less on average than they might make now before bonuses even though all those jobs pay well enough. Or alternative these guys will go out and rustle up a few hundred million of their own to bet on that subprime mortgage market- I hear its a gonzo way to earn some cool cash before it tanks.
You know after Merck business types blew the chance to release the Vioxx heart data on their terms, confine use to those at low risk and make only couple hundred million yearly on it vs billion or so they paid extra to those buffoons to keep them around during the crisis to have ‘seasoned’ people to manage the business in crisis. And at the board’s request. (Not so much to bring up the medical controversy on Vioxx and its competitors but it is no more dangerous than some NSAIDS yet out there including toradol,indomethacin and likely ibuprofen) I can provide data.
It is no wonder that we are in this mess…
NL
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