Chairman and CEO Richard Fuld is about to get even richer.
A recent revision to the vesting schedule for a series of restricted stock grants given a decade ago to Fuld is boosting the Lehman boss' potential payout by an extra $186 million.
Two other top Lehman executives, President and COO Joseph Gregory and Chief Legal Officer Thomas Russo, also stand to benefit from the Wall Street firm's largess. Gregory stands to get an extra $128 million in stock, while Russo would receive an addition $34 million in stock.
Lehman disclosed the changes in the vesting schedule for the 1997 and 1997 restricted stock grants in a Friday regulatory filing. The firm, which declined to comment, says that starting next year it will begin awarding stock to the three executives in annual installments. The awards will run through 2016, "provided the executive continues to be an employee on the vesting date of such installment."
The change to the vesting terms of the restricted stock units is "intended to serve as incentives for these executives without obligating the firm to long-term employment contracts," according to the filing. Originally, the restricted shares would only vest if Lehman was sold or bought out during the three executives' tenures.
Lehman's decision to revamp the vesting period comes at a time when bonuses for Wall Street bankers are set to soar this year after a record year for corporate buyouts and a surge in initial public offerings.
In 2005, Fuld's total compensation totaled $34.5 million.
In recent years, restricted stock grant have become a popular way for Wall Street firms to shower executives with extra compensation. Once a restricted stock grant vests and is registered by the Wall Street firm, it can be immediately sold by an executive.
Starting next year, Fuld will receive 246,395 shares of restricted stock until 2016, Gregory will receive 169,496 shares, and Russo will receive 44,599 shares. The executives along with Lehman's compensation committee agreed to the changes on Nov. 30.
Lehman said that the restricted stock earned during that time was "pursuant to the performance formulae under these programs," yet because the firm's performance over those two years "greatly exceeded expectations, a portion of such restricted stock was limited to payment following a change in control or under other extenuating circumstances."
Shares of Lehman rose 29 cents, to $75.67.