Why a lot of people have little incentive to stay at Nomura

14 April 2011

1 minute read

Why a lot of people have little incentive to stay at Nomura

Nomura's Japanese stock is not doing well. It is not doing well at all.

Since the end of May 2008, it has fallen 75%. Since April last year, it has fallen 40%. The Japanese earthquake compounded the problem: Nomura's stock plummeted 22% in the aftermath. It's recovered since, but not fully: the stock is still 17% lower than before the earthquake happened.

This leaves Nomura bankers who have stock in their employer with little incentive to hang about - particularly if they've been paid in options, which are underwater. Legacy Nomura bankers are particularly badly off.

Nomura's share pain is all the more acute given some other banks' stocks have been doing quite well.

Goldman's shares are up 2% on last year and down only 9% on 2008. JPMorgan's are up 3% on last year and up 8% on 2008.

However, one headhunter working for Nomura insists the stock price is really no big deal and another says it's only a "marginal issue." Optimistically, any Nomura stock issued to employees this year could at least have significant upside. If Nomura bankers keep telling themselves that, all should be fine.

AUTHORSarah Butcher

Global Editor

Ar
Are you serious
15 April 2011
Sarah, Did you do any work on this or just spend 5 minutes looking up basic profit and earnings? So...Nomura is down compared to other firms that are not doing spectacular themselves and this implies employees are going to leave at a higher rate than usual??? I spent 10 seconds doing your exceptional reporting and BAC is down 58% from May 2008 to April 2011, which means everyone is leaving...I went into the local branch and no one is even there
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Ha
HappyBoss.co.uk
15 April 2011
What Nomura must do is take practical steps to identify their best bankers and obtain what I call a ROL - "Return of Loyalty" - the likely hood will be designed target plans to poach their talent, even more likely if there's no defence.
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Qu
Quake
14 April 2011
I hope not but can't help but think Nomura will be a case in business school of the biggest investment banking failure. An experiment that went horribly wrong. There is no franchise outside of Japan. The ROE at 1.8% is dismal. What does it mean? Nomura hires Producer X from the Street who brings in say $1.5 million but his cost is almost $1.4 million. Credit rating remains a major issue. I fear Nomura executives have no clue what hit them in the form of the earthquake.
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