Not even Credit Suisse did what GAM is doing now. Ahead of its takeover by Liontrust, GAM completely drained its bonus pool.
In an attempt to contain costs ahead of its takeover by rival Liontrust, GAM, the beleaguered Zurich-based asset manager reduced its bonus pool to zero, excepting contractual bonuses for fund managers.
Needless to say, the timing of the decision, delayed since February, is causing anger among employees, according to a «Bloomberg» (behind paywall) report Monday, citing people familiar with the matter.
Necessary Leeway
The decision is essentially a reflection of how quickly sales fell last year said CEO Peter Sanderson. He said the elimination of bonuses gives the company, which had 541 employees at the end of March, the leeway to remain safe through the transaction.
GAM agreed earlier month to be acquired by London-based Liontrust Asset Management for 107 million francs ($119 million) and create a $66 billion global asset manager.
It also draws a line under a turbulent period for GAM beginning five years ago and included the closure of nine funds and the firing of star bond trader Tim Haywood.
