Salomon to list reserves for penalties Buffett apologetic about violations

September 24, 1991|By New York Times News Service

NEW YORK -- Salomon Brothers plans to announce in mid-October the amount of money it will hold in reserve for government fines and the costs of lawsuits that the firm expects from the Treasuries market scandal, Salomon told customers yesterday.

Wall Street executives also said the firm would determine bonuses for employees within 30 days and that payments would be far more discriminating than in the past.

One executive said he had heard Salomon planned to pay its best people more money than they expected, while cutting back significantly on pay to junior executives.

At the meeting with institutional money managers and other customers, Salomon executives, including Warren E. Buffett, the firm's acting chairman, discussed Salomon's financial outlook.

Some clients said Mr. Buffett was very apologetic about the firm's violations of Treasury trading rules.

At the meeting with about 250 clients at Salomon's headquarters at 7 World Trade Center in Manhattan, Mr. Buffett told the clients that 96 of every 100 of Salomon's equity and bond trading customers had continued to do some business with the firm.

One client said Mr. Buffett was addressing concerns about the firm's future raised by its disclosure last week that it was selling billions of dollars of securities to help finance its operations.

Yesterday's meeting appeared to have an initial modest success, Wall Street executives said.

The company's stock also appeared to respond. Salomon Inc., the investment firm's parent, fell more than $1 at the opening of trading on the Big Board yesterday on worries about the firm's financial health. After the meeting, the stock rebounded somewhat, closing at $21.75, down 75 cents.

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