City moguls are still raking it in
TIMES may be hard, but the titans of the Square Mile and Wall Street are still making millions. Michael Dobson, the new chief executive of City fund manager Schroders, is in line for total rewards of up to £15m if he succeeds in turning round the firm's fortunes.
In each of the next three years he will receive a basic salary of £200,000, a minimum cash bonus of £1.8m and free non-voting shares worth at least £1.5m. He will also be given up to £3.75m of free shares if Schroders' price doubles over the next five years.
Dobson has already taken up an option to buy 500,000 shares worth around £3.5m. Schroders bought out Dobson's investment boutique Beaumont for £33.5m to secure his services. That deal brought him a further £8m, mainly in shares.
Details of his package are contained in a circular to shareholders spelling out the terms of the Beaumont deal. Schroders has been criticised for paying too much, despite the City's high regard for Dobson. His contract also contains a lucrative safety net, guaranteeing him three years' salary at £3.5m if he is wrongfully sacked before 2004.
American financier Bruce Wasserstein is believed to be negotiating with his German bosses at Dresdner Bank over his own golden handshake. Tensions between him and the Germans arose after he held talks with rival Lazard about becoming its chief executive.
The legendary deal-maker sold his firm Wasserstein Perella to Dresdner for a heady price of almost £1bn. After the takeover, profits at Dresdner Kleinwort Wasserstein fell 65% in six months. Dresdner's parent Allianz on Wednesday reported a third-quarter loss of £28m, after estimated terrorism losses of £900m.
