Lehman formula

Definition

Investment bankers' compensation formula developed by the securities trading firm Lehman Brothers. In its original form, it computes the fee or brokerage as follows: (1) 5 percent of the first million dollars of the sum involved in a transaction, (2) 4 percent of the second million, (3) 3 percent of the third million, (4) 2 percent of the fourth million, and (5) 1 percent of everything thereafter. In inflationary times, however, investment bankers often demand a multiple of these percentages.

单词	Lehman formula
释义	Lehman formula Definition Investment bankers' compensation formula developed by the securities trading firm Lehman Brothers. In its original form, it computes the fee or brokerage as follows: (1) 5 percent of the first million dollars of the sum involved in a transaction, (2) 4 percent of the second million, (3) 3 percent of the third million, (4) 2 percent of the fourth million, and (5) 1 percent of everything thereafter. In inflationary times, however, investment bankers often demand a multiple of these percentages.
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