Despite all the layoffs we've seen in banking, with more expected as industry consolidation continues,
retaining talent is still a big issue for merging banks. That's particularly true for Bank of America Corp., whose chief executive Ken Lewis has said he's committed to keeping the high-producing brokers of newly acquired Merrill Lynch & Co. According to Dave Kompare, who is North American lead for the corporate transaction and transformation group at Hewitt Associates Inc., blending those cultures won't be easy.
To illustrate, Kompare uses Deutsche Bank AG's experience when it bought derivatives powerhouse Bankers Trust in 1998.
"Deutsche Bank put in place some of the most lucrative retention awards that had ever been seen up until that point," says Kompare. "If you look at what happened, a number of the executives with those awards left. ... When you look at the amount of money left on the table, you have to say there was something more at play than just money."
So what was it? Cultural issues likely played a role, says Kompare -- specifically trouble blending the more conservative culture of Deustche Bank with the looser environment of Bankers Trust. The deal did turn out to be a positive one for Deustche Bank, but its experience may hold lessons for Bank of America, as it considers the best fit for Merrill Lynch and its thundering herd.
- Suzanne Stevens
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