03/28/2008 02:45 am ET Updated May 25, 2011

Merrill Lynch Cuts Bonuses Of Mortgage Bond Specialists By 80 Percent

Merrill Lynch & Co., the securities firm that reported a record $2.24 billion third-quarter loss, told fixed-income managers to cut 2007 bonuses by an average of 40 percent, according to two people briefed on the matter.

Payments may fall by as much as 80 percent for traders who specialize in the mortgage bonds and collateralized debt obligations that posted the steepest losses, said the people, who declined to be named because the decisions aren't public. Bonuses may drop 20 percent for interest-rate traders and 60 percent in the New York-based firm's corporate bond unit, the people said.

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