Yesterday's award of retention bonuses, to be paid to Warburg employees in a mixture of cash and equity over the next three years, gave a clear indication of where employees stand in the new hierarchy. All staff have been interviewed by top management over the past two weeks.
Later this week the firm will reveal the positions of its 500 middle managers, adding detail to the organisational plan circulated internally last week. Insiders said that several senior members of the old Warburg regime have been left in limbo during the reorganisation.
The award of retention bonuses left some staff pleased, and others worried for their future. "There were heavy differentials," one member of staff said.
A member of Warburg's corporate finance team, which is said to have been targeted for cuts by SBC managers, said colleagues had been under- whelmed by the size of the offers, which represent about pounds 50,000 per employee.
However, some staff were offered up to twice their annual salary to remain loyal to the merged group.
The bonus announcements represent a key element in the attempts of Marcel Ospel, chief executive of SBC Warburg, to force through a lightning-strike merger without causing wholesale desertions among staff of the British bank. Mr Ospel said he will be spending pounds 60m to ensure that the most valuable Warburg staff acquired as part of the pounds 860m purchase remain loyal to the combined Swiss-British house.
About 1,000 of the combined group's 11,000 staff are expected to be cut, less than the initial rumours of 2,000 job losses. "You need a bit of a shake-up so that everyone gets forced intellectually and emotionally to absorb this new wave forward," Mr Ospel said.
The award of retention bonuses came on the same day as the release of figures by Acquisitions Monthly showed that Warburg was knocked off the top perch for the value of mergers and acquisitions work in the first six months of 1995.
Lazard Brothers, which acted for Glaxo in its takeover of Wellcome, came in first with deals totalling pounds 10.8bn. Baring Brothers, the collapsed merchant bank recently sold to ING, the Dutch group, came in second.
Corporate financiers were encouraged by news that the value of all British transactions in the first half of 1995 exceeded the figure for the whole of 1994. However, Philip Healey, editor of Acquisitions Monthly, warned that the consolidation in the investment banking community, which has seen three British houses fall to Continental banks in recent months, would lead to a shake-out among client lists.
"It will be interesting to see how many UK clients will begin to feel that they want a British-owned bank around them," he said.