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Lehman’s Chief Folds on His 2008 Bonus 


Last week, Lehman Brothers‘ embattled chief executive Richard S. Fuld Jr. made a peace offering to the investment bank’s managing directors. He and the firm’s new president, Bart McDade, said they would forgo bonuses this year.

Not that they’ll go hungry. Mr. Fuld was paid more than $40 million in 2007 alone (and was awarded huge amounts of restricted stock). And Mr. McDade surely did pretty well as the head of the firm’s equity division.

The meeting was held to explain the dismal second quarter result to Lehman’s managing directors - the highest level of employees beneath executives - and to rally them around Mr. McDade and Ian Lowitt, the newly appointed chief financial officer.

It remains unclear whether Mr. Fuld’s and Mr. McDade’s promises apply merely to cash bonuses or also to stock options. A Lehman spokeswoman declined to comment.

A managing director asked Mr. Fuld why he did not purchase one million shares of Lehman stock last week when it dove downward after earnings, according to one person at Lehman Brothers who heard about the meeting.

The response of Mr. Fuld, who already owns about 3.4 million Lehman shares, was an icy glare.

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