Executives at NationsBank Corp.'s Montgomery Securities unit are demanding that the banking company renegotiate their contracts in the wake of a plan by NationsBank to take control of Montgomery's high-yield bond business.
In a memo Wednesday, the Charlotte, N.C., banking company said NationsBank's Thomas White would run high-yield trading, research, and sales when NationsBank completes its planned merger with BankAmerica Corp. this year.
Mr. White was chosen for the job over Jerome Markowitz, a Montgomery partner. NationsBank had agreed to give Montgomery executives control of high-yield trading, research, and sales when it bought the San Francisco investment bank last year.
The move leaves many Montgomery junk bond executives questioning their future at the company; some are looking for new jobs. But under their contracts, if they leave before October 2000, they must repay part of the incentive packages they got when NationsBank bought Montgomery.
Ginny Mackin, a NationsBank spokeswoman, said the company will not comment on whether it would change the terms of its contracts with Montgomery partners.
"Clearly the Montgomery expertise and talent is important to us," she said. "We want them to be part of our global growth."
Thursday, Bloomberg News reported that Montgomery junk bond executives Peter Wilson, Ashley Cooper, and Ned Zachar are looking for new jobs. Mr. Wilson runs high-yield trading; Mr. Cooper, sales; and Mr. Zachar, research.
In other signs that NationsBank would take control of the high-yield business, Bob Griffin, a BankAmerica executive who oversees junk bond financing for the San Francisco banking company would report to Edward Brown, who runs capital markets at NationsBank. Mr. Griffin had been slated to work for Montgomery.