When stock ownership isn't such a good idea

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Bridgewell's lower-than-expected profits show what can go wrong when stock-owning bankers get the hump.

Bridgewell issued a profit warning last Thursday after being forced to up bonus payments for key performers to offset competition from rivals. Recruiters say bonuses needed to rise in compensation for the falling share price: staff at the broker own around 45% of its equity, the price of which has fallen around 36% since June. The exit of the chief executive has added to the disquiet.

Bridgewell doesn't pay atrociously - accounts for its last full year show the average employee earning 141k in wages and salaries in the 12 months to December 2005. But those payouts were apparently heavily skewed in favour of the biggest cheeses: "They do quite well in terms of revenues, but there never seems to be enough to go around," says one headhunter.

With the company's stock-owning senior staff likely to be most disgruntled about the underperforming stock, it's unclear whether Bridgewell's foot soldiers will see much of this year's pay increase.

However, juniors at the company are likely to be particularly irked if they're neglected a second year running - particularly as headhunters say junior and mid-ranking types at the likes of Goldman Sachs, Morgan Stanley and Lehman Brothers have been paid uniformly well.

At the same time, banks like Lehman - also known for its culture of stock ownership - are doing a better job of retaining their people through restricted stock. Lehman's share price rose 30% last year, and chairman and chief executive Richard Fuld was quoted in Financial News as saying he wants the stock price to double in the years to come.

Bridgewell isn't quite in the same league, but at least it has something to aspire to.

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