It may be the holidays, but some financial services executives are letting the troops know that management does not plan to fiddle, Nero-style, as the equity market burns.

Charles Schwab Corp. is the latest financial services company to announce cost-cutting measures in the face of bloodletting in the stock market and a weakening economy.

But the San Francisco giant is taking a different tack than companies such as First Union Corp. and Bank One Corp., which - certainly under more duress than Schwab - have fired thousands and are looking to further trim bloat.

In a memo to employees on Wednesday, Schwab's 13-member executive committee said it is cutting executive salaries temporarily from the top down to "aggressively control expenses during this bear market." The cuts are effective through March 1.

Co-chief executives Charles Schwab and David Pottruck are to take 50% reductions in their base salaries, and the executive committee's other members, as well as executive vice presidents, are scheduled for 20% cuts. Senior vice presidents will take a 10% pay cut, and all other officers will lose 5%.

All first-quarter bonuses will be paid in stock options rather than cash, the memo said.

Schwab executives also announced a salary freeze and a cutback on overtime, along with other measures, until further notice.

Financial services companies have been hit hard by the recent downturn in the financial markets, which just a year ago were booming amid a seemingly endless bull run. Executives at Morgan Stanley Dean Witter & Co. said the effects of a decline in market activity was worsened by a spike in compensation costs - the product of fierce competition for talent earlier in the year - and a fourth-quarter profit decline was the result.

First Union, another company looking at ways to achieve efficiencies in the current market environment, slashed its dividend in half Wednesday to conserve $1 billion of cash annually. The Wall Street Journal reported that the company also sent its employees a memo outlining policies aimed at saving another $377 million.

Though declining to comment on savings goals, a spokeswoman said the company's latest cost-reduction moves - such as a mandate to book travel through a designated online service that looks for the cheapest fares - are "pretty basic financial discipline."

Marni Pont O'Doherty, an equity analyst at Keefe, Bruyette & Woods Inc., said cost-cutting has been on the "front burner" at a number of banking companies as their revenues come under pressure, but that at some financial institutions it's almost a knee jerk reaction.

"It almost follows the chart of the Nasdaq stock market," which could be dangerous if the market is "just in a holding pattern," she said.

Since last spring First Union, Bank One, Bank of America Corp., and Wachovia have announced layoffs of thousands of people. Though the downward spiral in the financial markets was clearly an influence, some of the cutting was clearly aimed at addressing the overlap after a recent merger.

This month has been one of the bloodiest on record in terms of layoffs, with 60,000 job cuts announced, according to Challenger, Gray & Christmas of Chicago. Chase Manhattan Corp., which is about to close its acquisition of J.P. Morgan & Co., and Aetna Inc. have both announced major layoffs this holiday season.

There may be more than an attempted good will gesture behind Schwab's decision to avoid the mass layoffs that occasionally hit Wall Street. Gregory W. Smith, an equity analyst at Chase H&Q in San Francisco, said that if the market starts to go into recovery in the first quarter, Schwab is staffed up and ready to deal with it.

Schwab also has a reputation for running an efficient operation, which may be why it is loathe to fire people and opted instead to cut top managers' salaries, a move that could generate good will among employees.

Andrea d'Chalnoky, a head hunter at Spencer Stuart & Associates, a New York executive recruiter, said that she had never seen any such gesture at a Wall Street investment bank but that the performance-based bonus pool shrinks or grows naturally, depending on what the market is doing.

Mr. Smith also said that most top executives are paid largely in stock options so that their base salaries are just a fraction of their compensation. In the case of Schwab, Mr. Pottruck's and Mr. Schwab's base salaries are rumored to be about $800,000. For that reason, the pay cuts are "symbolic more than anything," Mr. Smith said.

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