$26 Million Sought by 2 Ex-Salomon Executives

Salomon Inc., parent of the Wall Street brokerage Salomon Bros., said in a proxy statement filed Wednesday that two former officers forced to resign in the wake of the Treasury-auction scandal last August, Chairman John H. Gutfreund and Vice Chairman Thomas W. Strauss, claim that the firm owes them $12.5 million and $13.6 million, respectively.

Salomon said the former executives’ rights to the disputed compensation “depend to some extent on factual and legal determinations which have not yet been made, and the conclusions ultimately reached may differ with respect to different compensation plans.” Salomon added that the company “may assert claims for recovery against the former executives.”

Investigations are now being conducted by the Securities and Exchange Commission and the Justice Department into possible wrongdoing by senior Salomon executives. The agencies are expected to report their findings, and file any charges, by summer.

In addition, in a letter to stockholders as part of the annual report, billionaire investor Warren Buffett said he would recommend Deryk Maughan to succeed him as head of the Wall Street firm’s brokerage arm.

British-born Maughan is now chief operating officer at the Salomon Bros. unit. Buffett said he expects to recommend that the board name Maughan chief executive of the brokerage division when Buffett steps down.

Buffett, now chief executive officer of the parent company and the brokerage, also said he plans to recommend “one or more candidates for the post of chairman and CEO of Salomon Inc.” when he leaves.

Reuters contributed to this report.