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2,500 Lehman jobs safe, rest are gone (UPDATED)

Some Lehman bankers can now breathe easily. In a conference call with journalists yesterday, Sadeq Sayeed, senior adviser to Nomura’s board in Japan, confirmed that the Japanese bank is buying Lehman’s equities (including equity derivatives) and advisory businesses, and will be keeping 2,500 staff across London, Europe and the Middle East.

Given Lehman employed around 4,500 people in London alone, jobs will clearly be eliminated in the bank’s large fixed income division, leaving at least 2,000 people with little in the way of a severance package and what looks like a much reduced pension.

Employment lawyers say they’ve already had calls from Lehman employees who’ve been left with nothing, but that there’s not much that can be done if their unit is going into administration.

“If you’re not in a unit that’s being bought out, you have very limited rights,” says Jane Mann, employment partner at solicitors Fox Williams. “As an employee, you are a preferred creditor up to 800 and you have a right to redundancy pay from the government.”

Bonuses better under Nomura

Lehman bankers who get taken up by Nomura may end up substantially better off this year than if Lehman hadn’t gone under. According to the Financial Times, Nomura has created a $1bn bonus pool for all its new staff.

Our research suggests that Lehman’s own bonus pot for Europe and the Middle East was looking fairly diminutive.

In its last 10k filing in May 2008, Lehman said the total amount allocated to variable pay (AKA bonuses) was down 34% for the first six months of this year on the $2.9bn it allocated for the comparable period of 2007.

With EMEA generating only 9% of revenues in the first half of 2008, a proportionate allocation of bonuses suggest EMEA’s 5,000 staff would have received a mere $159m between them for the first six months of this year.

Comments (15)

  1. 8bn, surely not!! Printer’s devil

  2. A $1bn bonus pool between 2,500 employees means an average of just $400k?!! – massively, massively less than what they’d have got at Lehman, or what they’d get at another tier-1 bank.

    Thus surely creating that offensive a bonus pool will be very counter-productive – it will further force people to look elsewhere as they know they can get paid double with their talent, will make people feel so demoralised.. I’d rather accept nothing than such a pathetic, offensive bonus!

  3. Henry where do you work? Sounds like you and your firm are killing it. I want to work there.

    You are talking nonsense. Those people will be very happy with their year end bonsuses – considering there weren’t getting September pay cheques as of last week

  4. Henry you are obviously haven’t been reading the news. Besides av. bonus for GS last yr (which was a record) was $640k. Word has it that this yr GS av will be done at least 50%, prob more, esp traders as capital & leverage have & will continue to be pulled. Times are changing, better wake up or u’ll be in for a shock.

  5. Henry is absolutely correct!
    $400k?! Codswalop!! Serious bankers will only accept bonuses of at least $1 billion; sure, some of the compliance/operations people may get derisory bonuses of only around $750k, but hey, these are hard times Henry…

    Henry’s Boss Reply
  6. Henry gets paid so much that he surfs this site all day. Saddo

  7. Henry… you are an absolute moron!

  8. Henry is dilussional and a loser!

  9. For senior front office professionals in equiteis the following is being tabled.

    100% of 2008 compensation to be paid in 2009: cash 70% april 09 30% Sept 09

    And 2010 comp is Min 100% of 2009 and will be paid April 2009 25% stock 75% cash

    Youll do wel to find anotehr bank that will beat this currently.

  10. I have got a feeling the second comment is a joke. Even Henry cannot be so delusional.

  11. At least Henry can spell.

  12. in the current market conditions it would appear strange that a new employer would have to offer anything like that level of bonus.The next bonus season is likely to be very poor in relation to the last across almost all institutions. Lucky Lehman employees and I will be phoning my friendly recruiter now and begging for a role at any unit / offshoot of Nomura..I always wanted to work for them especially as they seem to be really on the ball now and realise that they will have to lock me in for 2 years in case i disappear off to all the other Banks who are clamouring for staff !!!!!!

  13. Henry why don’t you go and serve fries at the nearest Burger King?

  14. kaboom! – return of the 2 year bonus guarantee!
    I simply do not believe it. no one is that dumb

  15. Reference my comment of 2 days ago..I called Nomura and asked for the 2yr guaranteed role…but was held in the queue of thousands who were looking for the “vanilla package” they promised to get back to me

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