(February 20 – 17:30 ET) – Merrill Lynch is cutting back its sales force in the United States, according to a story in the Wall Street Letter.

The WSL says that Merrill is looking to trim some fat, and while past cost-cutting moves have focused on management, this latest one is seeing it chop broker trainees in the U.S. “Merrill is trimming the fat from the training program by making it harder for broker trainees to meet the performance requirements necessary for continued employment, insiders said. The move is Merrill’s way of cutting staff in light of a shaky market and amid fear of a recession.”

The story says that rookie reps will no longer get extra credit for bringing in fee-based business rather than commission business. At the same time the firm has reportedly dropped a cap on rookie commissions, letting top producing youngsters maximize their potential.

“All this marks a reversal of Merrill’s emphasis on beefing up the training program over the last year. Last year the firm increased the duration its training program from two to five years, and encouraged branch managers to increase their broker head-count, leading many branch mangers to hire more trainees,” says the WSL.

These cuts are the latest in string of belt-tightening moves at U.S. brokerage firms facing a slower economy and weak capital markets.

At the same time, Dow Jones reports that Merrill paid its chairman, David Komansky, US$24.7 million in 2000, including a US$15.6 million bonus, up 89% from 1999. He also received an US$8.4 million restricted-stock award, up from US$2.1 million in 1999.

On top of his pay, Komansky also made US$14.5 million in options gains last year, and he was granted another 314,263 options.
-IE staff