The Law Dictionary

Featuring Black’s Law Dictionary Free Online Legal Dictionary 2nd Ed.

What is LEHMAN FORMULA

Lehman Brothers’ investment bankers’ compensation formula. Developed by the securities trading firm. Originally, fee or brokerage computation: (1) Transaction sum’s 1st million times 5 percent; (2) 2nd million times 4 percent; (3) 3rd million times 3 percent; (4) 4th million times 2 percent; (5) whatever is left times 1 percent. A multiple of these percentages is typically demanded by the brokers during times of high inflation.

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