LEHMAN BROTHERS is working on plans to compensate senior executives for the huge loss of value in their share options, alongside plans to raise capital.

Richard Fuld, Lehman’s chairman and chief executive, is known to have held talks with a number of Asian sovereign wealth funds. Rumours in Wall Street on Friday suggested Korea Development Bank may be poised to table a takeover offer for the banking group.

Alongside plans to shore up the balance sheet, Lehman executives are said to be planning a morale-boosting exercise to prevent a potential exodus of its senior staff.

Following the 85% collapse in the firm’s share price, lucrative share options awarded to executives and bankers have been all but wiped out.

“There has been talk at a senior level about finding some form of compensation for the loss of value in the share options,” said a source. Many senior staff received as much as 50% of their total pay packet in stock, he added.

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