JPMorgan offers Bear Stearns staff bonuses to stay

JPMorgan Chase is offering bankers at Bear Stearns bonuses to stay and support the controversial takeover, a person familiar with the situation said on Thursday.

JPMorgan chief executive Jamie Dimon met with hundreds of Bear Stearns executives late on Wednesday — his first meeting with the bank’s employees since the takeover was agreed to on Sunday.

At the meeting, Dimon proposed incentives to Bear Stearns employees retained by JPMorgan. Those employees who stay at the close of the deal would receive a bonus that will include JPMorgan shares, said the person, who was briefed on the meeting.

But it’s unclear whether Bear Stearns employees, who own about 30% of the firm, were swayed by the offer.

”There’s more questions than answers at this point,” said another person familiar with the workings at Bear Stearns.

Spokespersons for JPMorgan and Bear Stearns declined to comment.

Faced with a sudden cash crunch that threatened its collapse, Bear Stearns agreed to an all-stock offer from JPMorgan, which values the storied investment bank at about $285-million — a week ago it was valued at more than $7-billion.

The fire sale offer of about $2,41 a share at current market prices shocked Bear Stearns employees, who saw much of their savings evaporate.

As part of the deal, JPMorgan secured special Fed financing for $30-billion of Bear Stearns’ less liquid assets. The agreement also includes an option that gives JPMorgan the right to buy Bear Stearns’ valuable Manhattan headquarters, even if the deal is voted down by shareholders.

The transaction, which is seen as leaving little room for a counter offer, is viewed as a plum deal for JPMorgan, analysts have said. JPMorgan’s shares have risen over 20% since its Friday close. – Reuters

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