Lehman to Pay Stock Bonuses Mid-Year
Lehman Brothers will award mid-year stock bonuses to its 26,000 employees. The Wall Street Journal describes the award as "essentially a down payment for 2008 compensation." The remainder of the year's compensation will be paid as cash and stock in January, the newspaper reports.
The move was seen as an attempt to reward employees while the company faces tough times, and to take advantage of its stock price, which is now lower than it's been since 2000. However, one portfolio manager told Reuters that paying more stock isn't a sure way to retain employees when shares have been performing poorly.
Lehman is currently 30-percent owned by its employees. The Journal notes the new award has already been accounted for by the firm, and so won't increase that overall stake further.
Lehman shares rose on the news, as investors interpreted the bonus as a sign of the company's commitment to remaining independent - and not selling out at a bargain share price.