Bankers Trust New York Corp. has established a bonus plan that would pay some 35 top executives up to $200 million if they can boost the company's stock price to $100 a share.
The plan, dubbed "Partnership for 100," is aimed at retaining existing employees and encouraging new ones, said Bankers Trust spokesman Tom Parisi.
The company is rebuilding its core operations, which range from securities custody to corporate finance, in the wake of recent high-level departures. Some executives resigned - or were asked to leave - after questions about the company's derivatives sales spurred a federal investigation and legal battles with clients such as Procter & Gamble Co. and Gibson Greetings Inc.
Rival banks also took advantage of the turmoil to woo executives at Bankers Trust, whose shares rose $1.125 Tuesday to close at $71.375.
"It's been sort of a tough environment," for Bankers Trust, said David Berry, an analyst with Keefe, Bruyette & Woods, New York. "And BT has really good people, so it's subject to headhunting at the best of times."
The bonus plan, disclosed in a May filing with the Securities and Exchange Commission, calls for the key executives to receive up to 2 million units whose values are based on the price of Bankers Trust common stock. The human resources committee on Bankers Trust's board has awarded 1.8 million units so far, Mr. Parisi said.
The value of each unit will increase by $4 each time the company's stock price rises $1 from an initial level of $75 a share. The units will be worth a maximum of $100 in cash when Bankers Trust stock reaches $100 a share.
At the same time, the units won't begin to mature until the third year of the five-year program. That means the executives will have to stay with the company for at least three years to receive their bonuses, even if the stock price reaches $100 this year or next.
