LEHMAN FORMULA Definition

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LEHMAN FORMULA is a compensation formula originally developed by investment bankers Lehman Brothers for investment banking services:
- 5% of the first million dollars involved in the transaction for services rendered
- 4% of the second million
- 3% of the third million
- 2% of the fourth million
- 1% of everything thereafter (above $4 million)
NOTE: Most investment bankers now require an additional multiplier to offset inflation.

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GROSS PAY is employee salary prior to the application of taxes and other deductions.

EXPOSURE, generally, is the extent to which a product is kept in the public eye through the press, radio, television, and public appearances. In finance, exposure refers to the amount that a business or person can lose. For example: in foreign exchange, it refers to the degree to which a company is affected by exchange rate changes.

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