Posted on 09/21/2008 3:06:14 PM PDT by LiveFreeOrDie2001
Fury at $2.5bn Lehman bonus Nomura and Barclays table bids today for US giant’s London operation as bank’s administrator likens collapse to EnronJohn Waples and Danny Fortson STAFF at Lehman’s New York office who helped to cause the world’s biggest corporate bankruptcy are to share in a $2.5 billion bonanza. The bonus, which has been described by London staff as a “scandal” has been pledged by Barclays Capital, the British-based bank that last week acquired Lehman’s American operation and took on 10,000 staff. The $2.5 billion (£1.4 billion) pot, which has been ring-fenced as part of the acquisition, has caused huge resentment among the 5,000 staff in the firm’s European and Middle Eastern operations who are not guaranteed to be paid after this month. There are, however, hopes that half the jobs in Lehman’s Canary Wharf office could be saved today by either Barclays or Nomura. Bids are being submitted for its UK equities and investment-banking business. A Chapter 11 bankruptcy document filed by Lehman Brothers Holdings Inc says that Barclays has identified eight individuals out of the New York staff of 10,000 who are vital to make the deal succeed and a further 200 who are identified as “key”. It is thought that these eight directors will be locked into two-year contracts worth between $10m and $25m a year. Related Links Paulson hailed as hero for stemming market slide A sickening slump gives way to euphoria The $2.5 billion had been accrued as part of the contribution to Lehman’s group profits for the first nine months of the year. Barclays said there is no obligation to pay it out but analysts say the competitive pressure to keep key staff means he will have to. p>
(Excerpt) Read more at business.timesonline.co.uk ...
I know people like to have knee jerk reactions around here, but this is a business decision.
Paging Nell Minow! Can’t the share holders sue to reclaim the bonuses from the board of directors for not doing their jobs?
Let’s see if we can post this in a more readable format...
Staff at Lehman’s New York office who helped to cause the world’s biggest corporate bankruptcy are to share in a $2.5 billion bonanza.
The bonus, which has been described by London staff as a “scandal” has been pledged by Barclays Capital, the British-based bank that last week acquired Lehman’s American operation and took on 10,000 staff.
The $2.5 billion (£1.4 billion) pot, which has been ring-fenced as part of the acquisition, has caused huge resentment among the 5,000 staff in the firm’s European and Middle Eastern operations who are not guaranteed to be paid after this month. There are, however, hopes that half the jobs in Lehman’s Canary Wharf office could be saved today by either Barclays or Nomura. Bids are being submitted for its UK equities and investment-banking business.
A Chapter 11 bankruptcy document filed by Lehman Brothers Holdings Inc says that Barclays has identified eight individuals out of the New York staff of 10,000 who are vital to make the deal succeed and a further 200 who are identified as “key”. It is thought that these eight directors will be locked into two-year contracts worth between $10m and $25m a year
And it’s a political decision to bilk American taxpayers out of $700 billion dollars.
B L A T A N T C O R R U P T I O N
The share holders are the gamblers here, not the poor workin stiff who is doing as ordered by the firm.
Let’s hope this pisses lots of people off in the financial sector. Good to know that the Bushies weren’t gullible enough to try and bail these crooks out.
Using taxpayer money.
It’s Barclays money to spend. So it’s noneja business.
Bonuses are a big part of the pay at oil companies, as well. It is the reason that safety is often secondary to profit. The unit managers get big bucks for keeping costs down, and the little people who do all the work and take all the risks get little bonuses.
These are the people that made the company the big success it is today! You definitely want to keep these people around ...
... right?
The Chinese merchants used to take managers like that, chop off their heads, and hang them on poles in front of the place of business. Today the Chicom Red Army puts a bullet in their brains and sends the bill to the family.
Now "key staff" are to be rewarded with vast sums?
It's not like any of these guys isn't replaceable.
Lehman CEO Fuld is a Democrat. http://www.newsmeat.com/ceo_political_donations/Richard_Fuld.php
LOL.
“Using taxpayer money.”
No. The Feds let Lehman go BK. A British bank has bought it in bankruptcy proceedings.
Ping.
If Barclay’s want to pay a bunch of tools from LB a bunch of cash, well, that’s their prerogative.
sarcasm.....
But Paulson hasn’t detailed whether it would be available to all 7,200 commercial banks and 1,200 thrifts or to just a portion of them deemed to be “at risk,”—or where that “at risk” bar would be set. Also, would the program welcome assets from investment banks (perhaps even the estate of Lehman Brothers (nyse: LEH - news - people )? Lehman Brothers), hedge funds and other funds that have exposures?
http://www.forbes.com/2008/09/20/banking-bailout-paulson-biz-wall-cx_lm_0920questions2.html
There’s no taxpayer money in the Barclay’s purchase of some Lehman operations.
oh, my. that's where the rift to the alternate universe was -- where the cybermen and the time lords' prison capsule containing the millions and millions of daleks crossed the void and the world almost ended, until the doctor closed the rift, only rose got swept to the other side.
this is series.
That's why the financial news from CNBC is so, so, anti Bush.
But what can ya do.....Kill the country over it?
I did not think so either.
See post 22.
I guess the shareholders have to suck it up. This really is outrageous — particularly for the employees.
Leni
It still is rewarding them failure. Performance bonuses should be for performance.
Only a man of character at the helm of this ship of State can lead us out of this conundrum.
The new owners of a bankrupt company should be able to negotiate with employees in a free market fashion.
In my experience, "business decision", is the knee jerk excuse verbalized by a cockroach decision-maker who thought his actions would never see the light of day
Barclay’s has gotta’ have a direct line to Abu Dubai Fur Shur.
If this Fed attempt to regain trust in the markets fail, then all of them will fail, including the ones just sold to banks.
That is not being split between 5000 people. The 5000 people mentioned may not have a job after the end of the month per the article.
The bonus is going to about 8 directors and 200 key figures.
If the taxpayers are bailing out their sorry asses we OWN THAT MONEY.
TIME FOR THE PITCHFORKS AND TORCHES.
God, I am SO mad!!!
Not yet. But I'd be willing to bet that before this is all said and done that Barclay's ends up selling a lot of this toxic debt back to Hank Paulson. It sounds as if a lot of these foreign based banks that are holding US mortgage backed debt or derivatives based upon that debt are going to be eligible. Just like Lehman was the original line in the sand about not committing US taxpayer funds and within 96 hours $85 bill to AIG and a promise to buy back basically all distressed mortgage related debt and derivatives held by financial institutions. This thing has already begun to spin out of control and it's not gonna stop.
Take away the $700 billion bailout the US taxpayer is going to eat and what you say might be true ...
But then, if you take that away, what Barclays bought isn't worth a bucket of warm spit.
The only question to be asked regardless of the company involved is: Are they receiving any federal (taxpayer) money to help bring them out of their crisis?
If the answer is yes then the payouts should be scrutinized.
If the answer is no then that is the business of the parties involved.
If they pay out and then come hat in hand asking for taxpayer support they should be either told to pound sand or the big winners can give back the money to offset any taxpayer money. If I were a shareholder taking a hit I would certainly object to “incentivizing” corporate morons whose bad management practices ground the company into the dirt.
I have been watching this for months I still cant determine how this will effect me. Lehman is part of my company officers.
Near as I can tell they only got hosed on realestate deals.
No one knows nothing about the details.
Where do you see it’s divided among 5000 people?
Not if the voted to give the execs the bonuses
I don't know how they do it at Lehman or did it, but believe me when I tell you that few people will not see some of that cash after it gets distributed, even the doorman.
That's how it works, and how it's always worked.
Lehmans isnt getting a bail out from taxpayers
See my 43 where I explained this aspect.
They got hosed on credit default swaps, CDOs and the short sellers.
Repeat as necessary.
Tough decisions and volatile risks to resolve by Washington, however who is left holding the bag in the loooong run?
Who would you prefer to give the bag to?
So, based on some experience you have, you’re saying it will be split between 5000 people and not just the approx. 210 that the article mentions? I’m trying to understand where you came up with the 5000 figure.
Just pointing out the 5000 you mention are not part of the numbers for the bonus at all. They are in foreign offices and it looks like they have a “feeling” their services will not be required within days.
So yeah, it is really hard to see people getting the money in one building, but you are on the street.
And equitable share of that money to the doorman, in the current company operations is nothing near equitable. In fact, I can guarantee that doorman is a contractor and won’t see a dime.
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