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To: RealMuLan who wrote (24689)	3/2/2005 12:25:01 AM
From: RealMuLan	Read Replies (1) \| Respond to of 116555

Marsh Will Cut Dividend 50% and Increase Commissions By JOSEPH B. TREASTER Published: March 2, 2005 THE chief executive of Marsh & McLennan laid out a sweeping plan yesterday to rescue his company, the world's largest insurance broker, from a bid-rigging scandal that over the last five months has driven away business and raised grave questions about the company's viability. The executive, Michael G. Cherkasky, sketched the outlines of a leaner, more efficient company that would concentrate on fewer but more profitable clients. Marsh, which reported a net loss of $676 million for the fourth quarter, is laying off 2,500 employees after letting 3,000 go in November, cutting its dividend in half, increasing the commissions it charges for arranging coverage for businesses, and dropping thousands of unprofitable clients. In addition, he said, Marsh will shed MMC Capital, its private equity investment unit that had raised conflict-of-interest concerns, and will reduce benefits for its remaining 54,500 employees worldwide. "We think we will bounce back," Mr. Cherkasky said in an interview. Some analysts considered his outlook overly optimistic. A recovery by Marsh faces severe challenges. As part of its settlement in January over the bid-rigging accusations, the company has agreed to forgo incentive payments from insurance companies permanently; such payments yielded more than $840 million in revenue in 2003. Somehow, Mr. Cherkasky must make up for that. He said he expected to increase revenue at least $100 million by raising Marsh's commission rates, but that leaves $740 million. Some of it will be pared by reductions in operating costs, he said. nytimes.com