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September 30, 2003

Knight Breaks in New Comp Deal

By Gregory Bresiger

The Merrill Lynch influence continues to be felt at Knight Trading Group, which is led by Thomas Joyce. Joyce is a former head of trading at Merrill. Under his management, Knight's OTC traders are being paid on a salary plus bonus basis. Previously they had been paid based on a commission plus bonus system.

"We're making the change because this keeps us aligned with what the rest of the Street is doing," a Knight spokeswoman told Traders Magazine. However, the new compensation structure's introduction is making some pros uneasy. Knight traders will be paid their bonus in two parts this year. "We will look at this as a transition year to the new system," the spokeswoman added.

Several traders privately said that Joyce is taking these actions so Knight's traders will have a compensation structure similar to Merrill's and other big trading firms. Some traders at Knight, which last year was struggling to overcome market and regulatory problems, complained about the new pay practice. They are upset that they must wait for a large part of their bonus until the end of the year. The Knight spokeswoman declined comment on this.