Banker pay: Nomura may have struggled to get to grips with the investment banking culture it acquired with the European and Asian operations of Lehman Brothers. However, the Wall Street bank’s capacity for paying eye-watering bonuses does not seem to have been lost in translation. Sadeq Sayeed, architect of the Lehman deal and former head of Nomura in Europe, received a £22 million ($35 million) payoff following his resignation in March. It’s a reminder that, for all the talk of regulation and restraint, senior banker pay remains sky-high.
The Japanese lender is still trying to break into investment banking’s top league, but Sayeed’s payoff puts him in the Wall Street hall of fame. For example, it is almost twice the $18 million that Credit Suisse paid chief executive Brady Dougan in 2009.
True, the payout probably covers more than one year’s bonus. Sayeed spent a decade at Nomura and is bound to have accumulated stock options and other deferred pay, all of which may have vested at once when he left.
Sayeed’s contribution to Nomura should also not be understated. He is credited with helping the Japanese bank avoid billions of dollars of losses by slashing its $5 billion exposure to US mortgage-backed securities well before the worst of the crisis.
When Lehman failed, Sayeed persuaded Nomura to pounce on the Wall Street bank’s European and Asian employees, delivering the business largely intact at a time of huge uncertainty.
Yet it is too early to describe the Lehman deal as a triumph. Nomura’s investment bank may have reported several profitable quarters in 2009, but it only took a couple of months of difficult trading in May and June to push it to a 41 billion yen ($475 million) pre-tax loss.
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Sayeed may consider it unfortunate that his payoff was disclosed in accounts filed by Nomura’s UK-based subsidiary.
Yet the package is evidence that, despite attempts by regulators to rein in excesses, banks are still showering their top brass with cash.
As long as this continues, banks can hardly ask other employees to expect to be treated differently.