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Collapsed Lehman pays out big bonuses

Jennifer Hughes
Financial Times [1]
Tuesday, Dec 22nd, 2009

Lehman Brothers, the collapsed Wall Street investment bank, is hiring bankers and paying generous bonuses in London to stop employees defecting.

Lehman’s European business is recruiting middle and back office staff to help administrators PwC wade through the millions of transactions that must be reconciled with clients and trading partners to determine what is owed or can be claimed.

A judge overseeing Lehman’s US bankruptcy in New York last week approved an extra $50m (€35m) in bonus pay-outs to some 230 derivatives traders working to unwind the dead bank’s $10bn portfolio. The pay-outs come as bankers in the US and Europe face public anger over probable multimillion-dollar bonuses at the end of this year and, in Britain and France, additional taxes on the pay-outs.

Steven Pearson, a partner at PwC and one of the four joint administrators for the dead bank’s European arm, said the higher UK pay-outs reflected demand for the skills he needed and Lehman’s unique situation.

“We’ve made our strategy and reasoning clear to our creditors,” said Mr Pearson. “We need to keep up with the market and we have to bear in mind that staff here have much narrower career development options than at other banks.”

Full article here [1]

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