eFC Briefing: Life Without Bonuses

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If your annual production is below $50 million, don't be surprised if the envelope is empty. Barclays Capital reportedly plans to cut 3,000 jobs from Lehman's North American ranks and its own.

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Investment banks will concentrate depleted 2008 bonus pools among a thin layer of top producers whose total compensation exceeded $5 million in recent years, recruiters say. Even those stars are likely to receive less than half the bonus they got last year. And bankers whose production falls in the middle of the pack - less than $50 million - should expect no bonus at all. Worse yet: re-regulation and other secular changes could block bankers' bonuses from ever regaining the heights reached in 2006.

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The U.S. job toll from Barclays' acquisition of Lehman Brothers' North American business is pegged at 3,000 heads, or a little more than 20 percent of the two institutions' combined work force in the Americas. Lehman employees in mergers and acquisitions, equities research and cash equities trading may be spared because those functions don't overlap with Barclays Capital. The process is expected to conclude by year-end.

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In London, Nomura's separate purchase of portions of Lehman's Europe and Middle East operations was set to close Monday. Nomura reportedly will retain most of the 2,500 employees in the corporate finance and equities businesses, but is laying off some 750 people who worked in Lehman's European fixed-income division. Although the Japanese bank decided against buying that division, it intends to hire more than 150 Lehman fixed-income staff.

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Citadel Investments hired Timothy Bryan Wilkinson, John Alexander Goodridge and Alex Maddox, moves that will expand the firm's capabilities in global fixed income. All three join the Chicago hedge fund from Lehman Brothers. Wilkinson served as head of fixed income proprietary trading at Lehman and will join Citadel's proprietary trading group along with Goodridge. Maddox was named Citadel's head of securitized products in Europe. He was a managing director in Lehman's securitized products group in London.

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While firms in the Boston area are proving resilient in the face of market turmoil, unfortunately for job seekers, they're not entirely immune. The future of the Merrill Lynch operations in the area is uncertain once the firm is acquired by Bank of America. State Street Corp. is under pressure, as indicated by a plummeting share price, and Fidelity Investments says parents are saving less money for college because of the economic slowdown - a trend that directly impacts its businesses. As a result, Boston firms are being picky in hiring.

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Deutsche Bank said it hired Paul Stefanick, the chairman of Merrill Lynch's global mergers and acquisitions group, to head its global industrials unit. Stefanick will join Deutsche Bank in New York in January 2009 and report to Jacques Brand, co-head of global industry coverage.

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