Lazard head Bruce Wasserstein, who offered $1.6 billion to buy out a group led by Chairman Michel David-Weill to overcome objections to an initial public offering, may now face more difficult opponents: his coworkers.

Lazard employees now take home 81.5% of the bank’s net revenue, compared with 46.7% at Goldman Sachs Group, the most recent major Wall Street firm to abandon private ownership for public in 1999.

Lazard wants to cut employees’ share of revenue to 57.5%, the company said in its filing with the Securities and Exchange Commission.

The prospect of taking home a smaller slice of the firm’s revenue may prompt Mr. Wasserstein’s 173 partners to oppose the IPO and contemplate leaving the company should it go through, bank analysts said.

“Investment bankers are not team players, they are entrepreneurs – they look at how they can do well,” said a securities industry analyst at Punk Ziegel & Co. in Pinellas Park, Fla., Richard Bove. “The issue is what’s going to drive them to make money once you’ve paid them and reduced their near-term compensation?”

Lazard’s partners may balk at the pay cuts that Mr. Wasserstein will demand to bring the firm’s pay in line with Wall Street competitors unless he can persuade them that the stock they’ll get in the offering will make up for their losses, Wall Street recruiters said.

If Lazard’s top executives object loudly enough, prospective investors may be discouraged from buying shares in the IPO.

“Their big challenge will be, can they keep people motivated in a culture that’s been famously fractious?” said the head of New York-based executive recruiter Johnson Associates, Alan Johnson. “Their equity is heavily tied to retention so people have a big incentive to hang around – can everybody hug and make up?”

Lazard executives told employees in October that Mr. Wasserstein’s IPO plan had “near unanimous” support from the firm’s partners, according to a memo from the management committee.

A Lazard spokesman, Richard Silverman, declined to comment.

Mr. Wasserstein, 56, is counting on a successful IPO to raise the money to buy out the 72-year-old Mr. David-Weill, ending family control of the firm his ancestors started 156 years ago. Mr. Wasserstein has until December 31, 2005, to complete the IPO or resign under an agreement with Mr. David-Weill.

Bringing Lazard’s compensation down to 57.5% of net revenue would still leave the firm spending comparatively more money than Morgan Stanley or Lehman Brothers Holdings, as well as Goldman.

As of end of August, Morgan Stanley’s compensation and benefits as a percent of net revenue was 43%, up from 37% a year earlier.

Lehman’s comparable figure was 49.5% for the fiscal year ended November 30, 2004, down from 49.9% at the end of fiscal 2003.

Cutting bankers’ pay can reduce their motivation to work hard, Mr. Bove said.

“If you look at the Goldman Sachs deal, I think they’ve lost about half of the partners who were working there before the IPO,” he said

Mr. Wasserstein has launched his IPO at a time when mergers are making a comeback. After a three-year slide in M&A activity, global mergers rose to $1.9 trillion in 2004 from $1.22 trillion in 2003.

Lazard, run out of New York, London, and Paris, ranks 10th in the rankings of merger advisers this year, working on transactions worth $217 billion.

It advised on two of the biggest deals of the year: Bank One’s $55 billion sale to JPMorgan Chase & Company and Nextel Communications’ $41 billion sale to Sprint.