Newspaper article St Louis Post-Dispatch (MO)

Wall Street Chieftains in Line for Millions Rewards Come despite Lean Year

Newspaper article St Louis Post-Dispatch (MO)

Wall Street Chieftains in Line for Millions Rewards Come despite Lean Year

Article excerpt

Even a terrible year for Wall Street isn't bad for everyone.

Merrill Lynch & Co. will pay Chairman Daniel P. Tully $5.4 million in salary, cash bonus and restricted stock, according to a plan approved by shareholders last year.

Lehman Brothers Inc. probably will reward Chairman Richard S. Fuld Jr. with a $3 million compensation package, according to someone familiar with the investment bank's pay policies.

At Salomon Brothers Inc., which lost $685 million last year before taxes, Chairman Deryck C. Maughan will still be paid at least $1 million, according to the firm's proxy statement.

While lower than the compensation they earned last year, pay checks for these executives and their colleagues at competing firms go a long way to show that Wall Street pays well in good times, and almost as well during the lean years. The securities business hasn't been a bastion of pay-for-performance.

"Wall Street executives say, `In the good times, we have to reward the hell out of our people because it's only fair,' " said Graef Crystal, a compensation expert who teaches at the University of California at Berkeley. "In the bad times, they say, `We have to reward the hell out of them or they'll go to our competitors.' "

The compensation for executives at many publicly owned securities firms will be disclosed in the next two months because companies must file annual proxies with the Securities and Exchange Commission.

Investment banks will pay millions to their leaders even though pretax profits fell 80 percent in 1994, more than 5,000 Wall Street workers lost their jobs, and bonuses to the rank and file tumbled as much as 70 percent.

The worst bond market in 25 years made last year the most difficult for Wall Street since 1990, according to the Securities Industry Association. Stocks of brokerage firms fell as much as 25 percent.

To be sure, even members of the executive suite will see their compensation pared from last year. Merrill's Tully, for example, received $6.3 million in cash compensation and $1. …

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