Jamie Dimon, chief executive of JPMorgan Chase, made a plea to Bear Stearns employees to support his company's cut-price takeover of the collapsed investment bank – and he dangled the prospect of significant bonuses for those who stayed.
Bear's 14,000 employees around the world have been in a state of shock since the firm unravelled in just a few days amid a crisis of confidence among its trading partners last week.
But in his first meeting with staff at the Bear headquarters in Manhattan, Mr Dimon told them favoured employees could be given cash and JPMorgan shares to persuade them to stay. There will also be one-off payments to those who are made redundant when the deal closes, he promised.
JPMorgan hopes the prospect of bonuses will blunt some of the anger of Bear employees, many of whom had a significant portion of their pensions and savings in Bear stock, which has been all but wiped out. Under pressure from the Federal Reserve, which was concerned its collapse would cause a full-blown banking crisis, Bear agreed late on Sunday night to be taken over by JPMorgan for $2 per share, a fraction of its value the week before.
Bear shares continue to trade at more than twice the value of the offer – now worth about $2.43 after JPMorgan shares soared – because of speculation that shareholders will reject the deal and an alternative takeover or an orderly liquidation might ultimately yield more money for investors.
But asked whether he would raise JPMorgan's offer, Mr Dimon bluntly responded: "No." Nonetheless, he attempted to strike an understanding tone. "I don't think Bear did anything to deserve this and our hearts go out to you," he told the meeting with 400 employees on Wednesday night, according to one mole who reported the remarks to The New York Times.
Bear staff own 30 per cent of the company, making them an important constituency to win over as the shareholder vote looms.Reuse content