Bonus Watch:Lehman Stock Bonuses for Top Ranks

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Bonus season officially got underway yesterday when Lehman Brothers announced the restricted stock bonuses of it's top executives. Chairman and Chief Executive Officer Richard Fuld is getting $10.9 million in stock for 2006, and five other top executives at Lehman will divide up another $25 million of stock bonuses.
Fuld's stock bonus is actually less than last year, when he got $14.9 million, which has left some scratching their heads. But this probably reflects two things. First, Fuld's compensation package at Lehman was recently re-negotiated to guarantee him $180 million of stock on top of his annual salary and bonus, to be paid over the next ten years provided he stays with Lehman. And really, how much Lehman stock does any one person need.
Second, some of Wall Street's top executives are becoming wary of stock bonuses due to the critical attention they get from analysts when they sell the stock. Such insider stock sales get reported to the SEC, and can provoke concerns about the financial health of the company. So, at the top levels of investment banks, these stock awards can become very illiquid.
One thing that seems certain is that Fuld's total compensation for 2006, a year in which Lehman performed very well even in comparison to its high-flying rivals, will not be lower than last year's $34.5 million.

Lehman Awards Fuld $10.9 Million in First Stock Bonus
[Bloomberg]

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