Former Salomon chief sues for dollars 18m payment

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The Independent Online
NEW YORK - John Gutfreund, former chief executive of Salomon Brothers, is contesting an arbitration panel ruling denying him dollars 18m in compensation from the firm, and is suing to have the judgment overturned, writes Larry Black.

Mr Gutfreund, who resigned in 1991 in the wake of a scandal involving the firm's government-securities trading desk, said the New York Stock Exchange panel had ignored contract law by allowing Salomon to withhold deferred compensation due to him. He alleges that Warren Buffett, the Salomon shareholder who persuaded him to step down, pledged to honour the terms of his 1991 compensation package, but broke that oral promise.

Mr Buffett took over as chief executive while Salomon defended itself from charges that it manipulated the US Treasury market, and negotiated a dollars 290m settlement with regulators.

Salomon Brothers said there was 'nothing new' in the petition.