The Scoop
A merger between two Wall Street boutique firm collapsed after senior bankers balked at their retention bonuses.
The deal between advisory firm Perella Weinberg Partners and investment bank Piper Sandler envisioned paying Perella’s highest producers $2.5 million in shares of the combined company to stay on for as long as three years, according to people familiar with the matter. The rest of its partners were split into tiers and offered bonuses of between $500,000 and $1.5 million.
Perella CEO Andrew Bednar called some partners individually to describe their retention packages and gauge their reaction, the people said. They were almost uniformly negative, with the offers deemed “offensively low,” in the words of one banker, compared to the millions that top dealmakers at the firm make per year. That opposition led to the talks ultimately falling apart, some of the people said. The Financial Times earlier reported that the deal had collapsed. A spokesperson for Perella did not respond to requests for comment.
Perella Weinberg went public in 2020 and had seen its shares lose half their value since early last year. Bednar had sought a deal with at least one other bank earlier this year, although talks only progressed with Piper, some of the people said.
Rohan’s view
Expect to see a wave of departures from Perella in the coming weeks and months. Recruiters at rival banks are already fielding calls and making their own, I’m told. Bankers don’t want to work at troubled businesses, and seeking a deal signaled just that. Perella, the junior partner in these talks, had been seeking some kind of deal for months before alighting on Piper.
Bankers, especially rainmakers, have healthy egos. It’s difficult enough to lock them up, but it’s a critical step in talent-driven mergers like this. Failing to do so highlights exactly the risk that companies take when they try to strike deals.