4/11/2016 Morgan's Dimon to rivals: Back off from hiring Bear brokers - MarketWatch

Morgan's Dimon to rivals: Back off from hiring

Bear brokers
By Evelyn Juan
Published: Mar 24, 2008 8:17 a.m. ET
(This article was originally published Friday)

James Dimon, JPMorgan Chase & Co.'s JPM, +0.73% chief executive, has asked some Wall Street chief executives to
hold off for now from hiring some Bear Stearns Cos. BSC, +1.54% financial advisors.

People familiar with Dimon's move said he placed calls to chief executives at rival firms including John Mack at Morgan
Stanley MS, +0.13% John Thain at Merrill Lynch & Co. MER, +0.75% and Anthony DeChellis, head of private banking
Americas at Credit Suisse Group CSR, +37.38%

"He is asking everybody to lay off (from hiring Bear people) for a while," said a person familiar with Dimon's move. Dimon
is said to want time to come up with retention packages.

It is unclear whether the request to slow down hiring is only for brokers or whether it includes other employees such as
investment bankers and traders. A person familiar with Dimon's calls said he asked a handful of firms "that might be
appealing to his brokers" who are now being lured by rival firms.

Spokesmen at JPMorgan and Morgan Stanley declined to comment. A spokesman at Merrill Lynch did not return calls
seeking comment.

Bear Stearns has agreed to be acquired by JPMorgan for $2 a share in a deal - pending approval by shareholders -
expected to close in June. The sale came two days after JPMorgan and the Federal Reserve extended $200 million
emergency credit facility to Bear Stearns on Friday.

"JPMorgan is the prime company partner of the Fed in this action and it's all taken to reduce the volatility in the system.
That is to the benefit to Morgan Stanley, Merrill Lynch, Goldman Sachs (GS), Credit Suisse, and other Wall Street firms,"
said David Hendler, an analyst at CreditSights, a stock research firm in New York.

In asking for a respite from the recruitment of key Bear employees, Hendler said, Dimon is "basically saying, 'We're trying
to help the system and you're taking advantage of our gracious action. All is fair in love and war, but this is not a usual
merger situation.'"

JPMorgan is poised to absorb more than 14,000 Bear Stearns employees who altogether stand to lose more than $5.2
billion on their holdings in the company. The $2 a share deal would decimate the value of deferred compensation for
investment bankers, managers, and top financial advisors. Many Bear Stearns employees are now exploring their options
for leaving.

In its retail brokerage unit alone, seven Bear advisors who produced around $13 million in commissions and fees over the
past year jumped ship to Morgan Stanley in New York on Monday. On the same day, two brokers who had a combined
production of $9 million joined Morgan Stanley in Boston.

Morgan Stanley told managers Thursday to "slow down" in hiring Bear Stearns brokers. The managers can interview and
offer packages but they cannot bring in their recruits until the temporary moratorium is off. Hiring of Bear brokers is
expected to resume after JPMorgan has rolled out a retention deal to its more than 500 financial advisors in coming days.

It is still unknown which other firms have agreed to back down from hiring Bear brokers. Carri Degenhardt-Burke, who
recruits brokers for Wall Street firms, said Morgan Stanley's slowdown could give the firm more time to do due diligence
research on recruits. Building relationships between the manager and potential broker recruit is a process, she said.

But Rick Peterson, who also recruits brokers for major Wall Street firms, said Morgan Stanley's decision to back down
from hiring could put it at a disadvantage if other firms continue recruiting Bear brokers. If Credit Suisse, Deutsche Bank

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4/11/2016 Morgan's Dimon to rivals: Back off from hiring Bear brokers - MarketWatch
(DB), and other firms continue hiring, Peterson said, "that could be the end of the (temporary) freeze."

-Contact: 201-938-5400

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