Early next week, more than 75 top advisers and executives from Morgan Keegan & Co. Inc. will head to the Florida headquarters of their company’s soon-to-be-official new owner, Raymond James Financial Inc.
Retention payouts will be one topic on the agenda, following the deal announced earlier this month for Raymond James to buy Morgan Keegan for $930 million.
Raymond James delivered details of the proposed retention packages to eligible Morgan Keegan advisers Wednesday, Jan. 25. According to Raymond James, the awards will be paid within two weeks of the closing date of the merger, which is expected to happen on or about April 1.
One source told The Daily News – and a trade publication also has reported – that Morgan Keegan advisers producing more than $1 million will get as much as 70 percent of their trailing 12-month production as part of the retention payouts.
Advisers producing less than $300,000 aren’t expected to be offered retention payments. Advisers producing between half a million and $1 million will get as much as 50 percent; 40 percent for those producing between $400,000 and $500,000; and 30 percent for those between $300,000 and $400,000.
The letters delivered to Morgan Keegan advisers Wednesday were signed by the leadership teams of the Raymond James and Morgan Keegan private client groups.
“The range of advisers receiving these retention award offers is considerably wider than industry norms,” said Raymond James Chief Operating Officer Dennis Zank, who’s leading the effort to integrate the two firms, in a statement released by the firm. “We are offering five graduated levels of awards based on annual production, beginning with advisers whose trailing 12-month production is at least $300,000.
“We believe that the retention being offered to Morgan Keegan advisers is similar to retention offers in recent industry transactions of this type. While industry norms suggest that retention offers are made only to advisers with more than $500,000 in production, Raymond James and Morgan Keegan managements have determined to offer retention to advisers with $300,000 or more in gross production.”
At each financial adviser’s discretion, part of any cash award can be taken in restricted stock units of Raymond James. The advisers also will be eligible to participate in Raymond James’ benefits program, which includes profit sharing, employee stock ownership and 401(k) and stock purchase plans, among other things.
The Morgan Keegan advisers’ trip next week follows one made by Morgan Keegan branch managers to the Raymond James headquarters in recent days.
In early February, two more groups of between 300 and 400 Morgan Keegan advisers will also make the trip.