Lehman agrees to pay CEO extra $188 million

Lehman Brothers Holdings Inc., the fourth-largest U.S. securities firm, said it would pay Chairman and Chief Executive Richard Fuld an extra $188 million over the next 10 years.

Fuld was awarded grants a decade ago for about 2.5 million shares, which would have been payable if New York-based Lehman was sold. Instead, the board plans to give Fuld 10 annual installments of 246,395 shares starting next year provided that he stays at the company, according to a regulatory filing dated Dec. 1.

Lehman shares rose 95 cents to $76.33 on Wednesday.

Fuld, 60, has been in charge of Lehman since leading the firm’s spinoff from American Express Co. in 1994. Shares of Lehman soared 10-fold over the last decade, outperforming rivals.

Fuld was paid $34.5 million last year, less than Merrill Lynch & Co. CEO Stan O’Neal and more than Bear Stearns & Co. CEO James Cayne.

“It’s big payout, but it’s a reflection of his performance and that of his firm,” said Shaun Springer, who runs Napier Scott Executive Search Ltd., an industry recruiting firm. “He ultimately is responsible for the creation of enormous wealth for shareholders, the bank and the families of his employees.”

Analysts estimate that Lehman probably earned a record $3.9 billion in fiscal 2006.