Lehman Brothers Town Hall Meeting"How Are We Going To Get Paid?"

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Yesterday the fixed income group at Lehman gathered in an auditorium at their midtown headquarters for a "town hall meeting," according to two people who attended the meeting. Most of the meeting was filled with the kind of rah-rah talk that has become common on Wall Street as firms try to boost morale amid layoffs and loss-making quarters. But one bullet point on the presentation stuck out to those at the meeting. It asked a simple question: "How Are We Going To Get Paid?"
It's an important question at Lehman Brothers. Historically, the compensation expenses at Lehman Brothers has varied by a few decimal points around 50% of net revenues. And although Lehman's compensation ratio has typically been higher than it's Wall Street rivals, it's now at historically unprecedented--and financially unsustainable--levels. Lehman paid out $2.3 billion in the second quarter of this year, up from $1.8 billion for the same period last year. Revenues, as everyone knows, went into negative territory, with Lehman booking a negative $700 million.
At the end of the meeting one of the attendees pointed out that the bullet point question about how Lehman will be able to pay it's employees was never really answered.

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