SNC gives personnel pounds 30m loyalty sweetener

Staff at merchant bank pay the price of takeover crisis while broker's employees earn rewards

JOHN EISENHAMMER

Financial Editor

Seventy key staff at Smith New Court, the top UK broker, are to share in a pounds 30m loyalty fund to persuade them to stay with their new parent, Merrill Lynch, the US investment banking giant.

The incentives, made up of bonuses, equity and phantom stock, will be triggered in two years and eight months, the maximum delay allowed by law.

On top of this fund there will be a guaranteed limited bonus for a wider group of 300 Smith's staff. "We are offering people a level of protection, and a chance to buy into our strategy," Jerome Kenney, Merrill's head of corporate strategy who lead the negotiations with SNC, said yesterday.

The deal was clinched in late July for pounds 840m. Merrill is aiming to complete the integration of SNC's global operations very quickly, before pressing on with its main strategy of worldwide investment banking domination. "For Merrill, buying Smiths is a gigantic step but now we want to go for full leadership. You don't spend pounds 840m and stop. Particularly in Europe and Asia we are aiming for full leadership in all markets, which means adding more investment banking," said Mr Kenney.

The physical integration of the businesses in London is to be completed by the end of October, transforming SNC's headquarters into "the largest equity centre in the world", Mr Kenney said.

"There will be more non-Americans outside the US covering equities for Merrill than all the people in equities in our domestic market."

The integration of SNC's global operations is to be completed by the end of September. "By moving quickly and mixing it all up we will get over any differences," said Mr Kenney. While the old Smith Brothers name will live on in legal documents, Smith New Court will disappear as an entity, trading under the Merrill name, with some 1,050 people working in equities in London.

The speed of the integration has been facilitated by the virtual absence of overlap. Mr Kenney expects less than 20 jobs, in places like Japan, to be lost. "It is hard to believe there are two leading equity firms whose strengths correspond to the other's voids," he said.

"A year from today, there will be as many or slightly more people in combined positions than now." Merrill is comparatively weak in the secondary market in Europe and Asia, where SNC has its main strengths.

Michael Marks, SNC's chairman, becomes the first foreigner on Merrill's executive management committee in New York. Mr Kenney said Merrill had been looking at a number of City firms since last year. Merrill said there will be no formal arrangement with NM Rothschild, the major stakeholder in SNC.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee