Monday, May 12, 2008

Bonus-payment system of Investment Banks - Result

Razak, 37, CEO of CIMB Malaysia, says he tries to emulate U.S. investment-bank management styles.

He was one of the first managers in Malaysia to reward successful staffers with fat yearend bonuses.
(His own reward: 38 million CIMB shares, or 4.4%, worth $55 million.)

That means working New York-style hours, too. "CIMB has a reputation for being a very hard place to work," he concedes. But those long days are paying off.

Issues in bonus payment systems.

I came across this issue in Mint of 12 May 2008 (page 20). The item is a reprint from Wall Street Journal.

Jeffrey Liddle, an attorney in New York, says he filed an arbitration claim this week on behalf of a former mortgage-backed securites saleman at Merrill Lynch & Co. Despite having his best year ever, the saleaman's pay plummeted to about $190,000 from $1.2 million.

"He couldn't make enouhg money to feed his family," Mr Liddle says. The employee asked to be laid off, so he could receive a severance package. Merrill Lynch declined, so the salesman quite and took a job as a stockbroker at another firm.

How could it happen?

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