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Lehman's staff paid in shares
Bill Condie03.07.08
Investment bank Lehman Brothers has told staff they will get more of their pay in company stock this year.
"This special off-cycle grant underscores our confidence in Lehman Brothers' future," a memo said.
But former Lehman employee Walter Todd, now at Greenwood Capital Associates, said: "If I were working there now, I'd want cold, hard cash."
The company gave a share grant dated 1 July equal to 20% of employees' 2007 pay. The payout to everyone from support staff to heads of trading desks, is a down payment for 2008 bonuses. The rest, in cash and stock, will come in January.
About 30% of Lehman Brothers is owned by its employees but they have lost out on the investment this year, Lehman shares having fallen 65% on concerns about exposure to the subprime mortgage crisis.
The pay option is a good deal for Lehman. Its stock on 1 July was at its lowest since 2000.
