Cultures Collide At Nomura

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While Nomura Securities expands in the U.S., cultural and compensation issues have dogged its efforts to integrate the Asian and European operations Nomura acquired from bankrupt Lehman Brothers last September.

The Tokyo-based bank subjected its newly acquired businesses to corporate-level policies that offended many female employees, The Wall Street Journal reports. For instance, women joining Nomura from Lehman reportedly were ordered to remove highlights from their hair, and several were sent home from the trading floor for wearing short-sleeve dresses. Some women were forced to use e-mail addresses based on married names rather than the names they used professionally. Gender-segregated training sessions dished out instruction on hair styles, serving tea and seasonal wardrobe advice.

On the compensation front, the Journal says long-time Nomura bankers resent the two-year bonus guarantees given to former Lehman bankers to discourage defections immediately after the purchase. With the final guaranteed bonus installments looming on Oct. 1 and next March 1, members of the ex-Lehman contingent fear their bonuses will fall significantly in the future. The differentials are huge: while a Nomura division head might earn $250,000 total, his counterpart from Lehman reportedly could earn "tens of millions." Company-wide compensation expense doubled in the three months following the Lehman purchase.

Meanwhile, Nomura is aggressively growing its U.S. footprint. Head count in this country has soared to 855 from about 650 last September, and the bank currently is "recruiting heavily" for U.S. fixed-income and investment-banking divisions, according to the Journal. To head its U.S. equity operation, Nomura recently hired Ciaran O'Kelly away from Bank of America. This week the Federal Reserve Bank of New York approved its application to regain primary dealer status for U.S. Treasury securities, which Nomura had held for 22 years until dropping out in November, 2007 .

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