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Two-year guarantees for top staff at Lehman

More colour is emerging on the nature of the package being offered by Nomura to Lehman staff in London – and it looks very generous indeed. According to a totally anonymous (and possibly spurious) commentator on an earlier article, senior Lehman staff moving across to the Japanese bank are being offered two-year guaranteed bonuses based on the packages they received in 2007.

Headhunters give credence to the rumours. Bonuses for 2008 will apparently be paid 70% in cash in April 2009, with the remaining 30% paid in cash in September. Bonuses for 2009 will apparently be paid in April 2010, with the expectation of a 60/40 cash stock split.

“Overall, the 2007 bonus pool is going to be matched for 2008 and 2009, and certain key individuals are being given an exact match for both years,” says one equities headhunter. Another says MDs are being guaranteed their 2007 payout for both 2008 and 2009.

Nomura is also said to be extending its offer to some of Lehman’s 600-strong fixed income team, who were left out of its purchase of the equities and investment banking units. Earlier, The Times reported that Lehman’s asset management division is also attracting offers.

Less promisingly, it’s rumoured that Nomura will also be making 30% of people in Lehman’s equities and investment banking units redundant. Names apparently won’t be finalised for a few weeks.

Comments (20)

  1. that’s just not true. impossible
    Someone is having you on

  2. We’ve spoken to three headhunters now who confirm this is the case. They could, of course, be telling fibs.

    Sarah, Editor, eFinancialCareers Reply
  3. no doubt Japs give generous package to the top guys. however, i doubt the fate to those below. total pay is 30-50% lower in a Jap house vs Lehman in normal times

  4. To BC – Nomura dont have a choice. Unless they lock in staff, they will jump ship as soon as the weather is fair again and other banks (with a perceived strong franchise) recruit again, as we have seen previously,

    This method enables them to try and build the business over the next 18mths, hence making employees its a tangible opportunity worth staying for once guarantees expire.

    Its only natural that lot of people are very envious.

  5. It seems that most of the MDs were proposed 2-year guarantee package. FT is saying that Nomura is guaranteeing US$1bn overall for two years. Now M&A is going to be down 30-40% this year at least. I would assume that lots of VPs and Juniors will be make redundant at the new Lehman/Nomura entity.

  6. Lehman staff will leave once the conditions turn brighter in 2010. also, their pay scale will likely be aligned with Nomura next yr, i.e. scale down to match the parent co.

  7. any info on the fixed income side?

  8. It is positive information for people out there looking for jobs. This means the job market is less flooded with Lehman employees…

  9. To IBD saying that total pay is 30-50% lower in a Jap house vs Lehman in normal times. Where have you got this from? In Tokyo this is the case, but at Nomura International the pay out ratio is higher than any of the competition and is uncapped! They have attracted some top people over the past 2 years in fixed income and capital markets because of this, and people who make good revenues do not leave as they know they won’t get compensated the same way elsewhere.

  10. I’m sure this is true, I’ve spoken to several senior MDs at Lehman who have confirmed it.

    Additionally, you only have to read efinancialnews, to see the article that Nomura are creating a $1bln bonus pool for Lehman staff.

    What is the business they are acquiring worth without the human capital? It’s just a load of debts, rolodexes and computers.

  11. It should be noted that these contracts have 3 months notice period, and 6 months gardening leave, probably to help prevent a mass exodus in 2010 when conditions are brighter, after they’ve enjoyed their 2 year guarantees.

  12. These people should be guarenteed. People are under the elusion that the top earners at these firms get paid lots of money for doing nothing. These people have worked hard to get to where they have so why should’nt they be rewarded.

  13. I heard th US gov has the best bonus pool $700bn

  14. Nomura tend to pay slightly higher than mkt pay to attract top ranks overseas but NOT for non-senior staff. also they of course need to give 2-yr guarnatee package to retain dept heads. but package offered by Nom to those below is typically 30% below US/Euro IBs

  15. Congratulations to Sarah Butcher – a great early scoop. She gets too much unwarranted flak in these pages!

  16. It’s true, there will be significant bonuses paid to some but I’m afraid to say it will only be a very select few that hold the key relationships and hold the key information. Of course the Head Hunters will say that their is massive bonuses for all, they are hoping to attract as many of the ex Lehman guys to thier books as possible, an “introduction” of the candidate to Nomura or any other institution for that matter is in affect a lock down of that particular candidate for 6 months so that if Nomura should employ the individual any time over the next 6 months a fee is payable to the “introducing” Head Hunter, slightly more in depth than that but in principal that’s the case. This is a world of Vultures and right now they are circling Canary Wharf just waiting for the banquet to begin, sadly there will be more to come, crazily, when it does another load of crazy bounuses will be paid to some. But!!, people need to wake up to that fact that even this will dry up soon. In the space of 2 weeks we have gone from a massive skills shortage to a skills Tsunami!!!, The aftermath will not be a pretty sight.

  17. Who cares about the aftermath! Break out the bubbly the party has a few more hours to go!

  18. How will they earn these alleged bonuses??

  19. Lucky those who are offered the remarkable bonus guarantees. ! where exactly does the Nomura Employment Unit( likely based in Uzbekistan or somewhere else that is close to the action) think that all the big hitters at Lehmans would have gone to. As one who is remarkably close to the action, I could have assured them that there are droves of redundant people on the streets, often of very good calibre who would jump at a job right now.Many of these do understand that initially they might have to join on a lower package than they were on before.Its simple supply and demand..much supply and liitle demand.But hey …if Nomura wants to pay up..excellent..I need to sell a spacious house in Chiswick and I was worried about a dearth of buyers..seems my worries might be over

  20. You are all in a dreamy haze. What top people, have youi not figured that it is all been a scam. There is no meritocracy, just a bunch of lazy parasites who never worked a decent work’s day since they were 20.
    How much cash would a cash cow cash if a cash cow would cash cash??
    Top people….

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