JPMorgan Offers Bonuses To Keep Bear Brokers From Leaving
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JPMorgan Chase & Co., the third-largest American bank, will pay brokers at Bear Stearns Cos. a maximum bonus of 100% of the annual revenue they generated to keep them from leaving as the two companies combine.
Brokers bringing in more than $500,000 a year will receive about three-quarters of their totals upfront and the rest in stock of the New York-based bank, a spokesman of JPMorgan, Darin Oduyoye, said.
For those between $250,000 and $500,000, the offer is 25% cash plus 25% stock. Brokers with revenue under $250,000 won’t be offered a bonus.
The retention packages may prompt some of Bear Stearns’s top performers to join rivals such as Morgan Stanley or Merrill Lynch & Co., where they can get signing bonuses twice as high as JPMorgan is offering, according to the president of executive-search firm Diamond Consultants LLC in Chester, N.J., Mindy Diamond, said.
“I think the million-dollar-plus brokers were hoping for something closer to 200%,” Ms. Diamond said. “Many had a lot of their wealth wrapped up in Bear Stearns stock, and taking another offer is their best wealth-replacement strategy.”
JPMorgan agreed to acquire New York-based Bear Stearns in an all-stock transaction that values the firm at about $2.4 billion, or $10 a share.
