The Regents - University of California | Office of The President

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which reached $20 million per year his last few years at Salomon. According to
the New York Times News Service:
[a] former analyst at the form [Salomon], Grubman’s pay
was tied specifically to the deals that the firm did in
telecommunications. “I remember meeting with these
guys and they would say, ‘Here’s how much we’re
paying you, deal by deal,’” this person said. “There was
a formula.
199. Grubman also acted like an investment banker, recruiting companies
to Salomon for public offerings. According to Securities Data Company, Grubman
helped Salomon do more telecommunications offerings than any other firm since
1997, 18 public offerings between 1997 and 2000 for a total of $5.7 billion in
deals. In 1997, Grubman reportedly brought at least $60 million in investment
banking revenues to Salomon. See Financial News, November 10, 1997.
D. Grubman and Ebbers Had Close Relationship
200. Grubman began covering WorldCom for Salomon in 1995. Grubman
had a close relationship with WorldCom, and especially its CEO, Ebbers. Ebbers
and Grubman first met in 1988. Their relationship included Grubman socializing
with Ebbers and attending his wedding in 1999 (his expenses were paid for by the
investment banking arm of Salomon rather than the research department).
201. Grubman explained the relationship in an August 31, 1996 USA
Today article: “We both come from the wrong side of the tracks vis-a-vis the
financial community . . . And I can relate to him far better than most people I deal
with. Bernie and I would have a strategic session in Jackson, and it usually was
while shooting pool and drinking beer.”
202. Grubman’s relationship with Ebbers was more than a close personal
one. Grubman became a de facto advisor to WorldCom and its cheerleader, in
total conflict with his role as a “neutral” analyst.
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COMPLAINT