Putnam president Larry Lasser has announced plans to lay off 4% of his 6,000-strong workforce, just weeks after it was reported that he secured a bonus of $33m (€37m) in 2000.
Financial News reported last week that Lasser's total remuneration last year was $34m, including a $1m base salary. The bonus reflected bumper growth for Putnam's revenue last year. A spokesperson for holding company Marsh & McLennan pointed out that Lasser's bonuses are capable of falling as well as rising.
A total of 256 staff of US-based Putnam will be laid off, including five portfolio managers and four analysts.
In a memo to staff, Lasser said: 'We recognise and regret the hardship this action will have on those people whose jobs have been eliminated. We think we did the right thing for the company and the more than 6,000 employees who carry on.'
'I accept that Lasser's done a great job over the years,' said one consultant. 'But it looks more than insensitive of him to lay off these people after such a generous bonus. It's equivalent to $128,900 per lay-off.'
Lasser said the lay-offs were a reaction to market changes and the need to reduce expenses. 'By some measures, including the new business we earned, last year was our strongest ever,' Lasser said in the memo. 'The market changes which began last year have unwound some of our growth... Putnam's size and expense levels should be brought closer to what they were before last year's growth spurt.'
That spurt allowed operating income to grow 23% to $1bn, making Putnam the most profitable business within Marsh McLennan.
Lasser's bonus package was criticised when it was revealed in a proxy statement filed by the holding company, because Putnam's assets under management decreased last year following a fall in the markets.