Headhunt bonuses return to City

The good times are returning to the City after a troubled decade.

US firm Lehman Brothers is offering staff $10,000 (£6,000) a head for any potential executive they recruit to the investment bank.

The move will provide renewed hope for the 26,000 who have lost their jobs in the City in recent years.

The Americans are offering the incentive to staff in London and other financial centres throughout the world for the first time since the mid-Nineties when the practice was widespread.

Lehman will be targeting potential vice presidents, a middle ranking title in US investment bank phraseology.

A lower price on the heads of less senior recruits will be available.

The bounty hunters will be paid in addition to their traditional year-end bonuses, which have been hard hit in recent years of falling share prices.

The bear market led to a decline in merger and acquisition activity, the traditional area for investment banks such as Lehman to operate.

A Lehman spokesman said of the bonuses: "This is an important and growing component of our recruitment effort which will help us to attract talented people from as wide a candidate pool as possible."

The move will trigger similar moves from other City investment banks. Morgan Stanley and Goldman Sachs have both reported earnings rises in the second quarter of this financial year, the first since 2000.