NEW YORK - Wachovia Corp. last week put the finishing touches on its retention package for brokers with A.G. Edwards Inc., and the company plans to announce details as early as today or as late as Wednesday.
Although Charlotte, N.C.-based Wachovia didn't release any of the particulars of the retention package, some potential details were widely discussed by A.G. Edwards' 6,618 representatives and recruiters at competing firms who are talking to those reps.
According to two industry recruiters who asked not to be identified, one scenario could hurt small producers, with reps producing less than $350,000 in fees and commissions getting no bonus, and bigger producers in the range of $800,000 to $1 million getting a bonus of 100%.
Another potential retention bonus could have brokers receiving 40% of their fees and commissions, one of the recruiters said.
"The package is in draft form,'' Wachovia spokesman Tony Mattera said.
"I wouldn't comment on what people are guessing. The facts will be disclosed next week,'' Mr. Mattera said Friday.
Wachovia announced plans to acquire A.G. Edwards for $6.8 billion late last month. The new broker- dealer, called Wachovia Securities and based in St. Louis, will be a behemoth, second in size only to Merrill Lynch & Co. Inc. of New York with more than 15,000 reps and advisers operating through a variety of business channels.
Wachovia has set aside more than $1 billion for broker retention over the next six years.
Culture shock
Meanwhile, the registered reps at St. Louis-based A.G. Edwards have experienced a wide range of positive and negative emotions, and thoughts concerning their fate as part of Wachovia, a giant bank that has built up its retail-brokerage group, Wachovia Securities LLC, through a number of acquisitions.
Some Edwards reps are fearful of the firm losing its close-knit culture when it becomes part of Wachovia.
"My initial reaction was shock,'' said one Edwards rep, who asked not to be identified. "But as this begins to unfold, I'm looking at this very enthusiastically.''
The key to a successful merger would be to combine the client-focused culture of A.G. Edwards with Wachovia's deep pockets, said the rep, who added that such a change creates "nervousness'' among the brokers.
