Barclays Capital promised to pay the full accrued bonus amounts and maintain current terms of employment - including severance in case of dismissal - for some 10,000 U.S. employees of Lehman Brothers, if Barclays' proposed purchase of Lehman's U.S. investment bank takes place.
Citing documents filed with the U.S. Bankruptcy Court in New York, Financial News reports that Barclays agreed to pay 100 percent of the accrued bonus pool for transferred employees on or before March 15, 2009. However, "The bonus payments can be reduced if more than 10 percent of the employees transferred to Barclays voluntarily choose to leave," the article said. For the deal to close, Financial News says at least 70 percent of Lehman's active staff in North America must transfer to Barclays, and closing must occur no later than Sept. 23.
One high-ranking employee who won't be transferring is Mark Shafir, Lehman's co-head of mergers and acquisitions. Citigroup announced Thursday that it hired Shafir as head of global M&A, a role that became vacant when Frank Yeary left in June to become vice chancellor at the University of California's Berkeley campus.
Lehman accrued total compensation of $6.1 billion for its approximately 26,000 employees worldwide during the first nine months of its 2008 fiscal year, according to its quarterly results announcements.
The court documents say that all employees in Lehman's U.S. broker-dealer business will have the opportunity to work for Barclays Capital "on the same terms they currently have with Lehman through to the end of this year." Any employees who are terminated by Barclays without cause will be paid the same severance that Lehman provided, which is 20 percent of their prior-year compensation.