Dec. 12 (Bloomberg) -- Lehman Brothers Holdings Inc. awarded Chief Executive Officer Richard Fuld $35 million in stock for 2007 after the largest U.S. underwriter of mortgage bonds reported lower losses than its competitors from the collapse of the subprime home-loan market.

Fuld, 61, received 551,442 units of restricted stock, valued at $35 million as of the Dec. 7 grant date, according to a filing yesterday with the U.S. Securities and Exchange Commission. The payout is 4 percent more than a year ago.

Lehman, the fourth-biggest U.S. securities firm, probably earned a record $4.1 billion in 2007, while profits at Wall Street rivals Morgan Stanley, Merrill Lynch & Co. and Bear Stearns Cos. probably fell after mortgage-related writedowns, according to analysts surveyed by Bloomberg.

``Those leaders who've managed to steer their companies clear of the problems during these really difficult times should be rewarded handsomely,'' said John Challenger, head of Chicago- based recruiting firm Challenger, Gray & Christmas Inc. ``And organizations where earnings have fallen, the leaders should set the example and accept bonus cuts from previous years.''

New York-based Lehman was the first of the industry's five largest firms to disclose the size of stock bonuses for top executives.

Goldman Sachs Group Inc., the biggest U.S. securities firm by market value, and Lehman are the only two of the five that analysts predict will report record profit for 2007, Bloomberg data show. Lehman has disclosed $700 million of writedowns for mortgage-related assets and leveraged loans, compared with Merrill's $8.4 billion. Lehman may say tomorrow that fourth- quarter earnings declined 17 percent, according to a Bloomberg survey of analysts.

Stock Slump

The world's biggest financial institutions have taken about $77 billion of writedowns and other charges tied to subprime mortgages, which are made to borrowers with the weakest credit.

Lehman rose 82 cents to $61.96 in German trading after falling 6.9 percent yesterday. The drop occurred as investors speculated that the Federal Reserve's quarter-point interest-rate cut will fail to prevent a recession. The stock has dropped 22 percent this year, outperforming all its peers except Goldman.

Fuld received a stock award valued at $33.5 million in 2006. His total pay was $40.5 million, including salary and cash bonus. The increase was 17 percent in a year when Lehman's profit climbed 23 percent.

Five other top executives at Lehman received a total of $58 million in stock for 2007, according to separate regulatory filings. President Joe Gregory was awarded $29 million and Vice Chairman Thomas Russo was given $9 million. Their total compensation figures, along with Fuld's, will be reported in March when the firm files its proxy for the annual shareholder meeting.

Fuld has run Lehman since its 1994 spinoff from American Express Co. and presided over a 12-fold increase in the share price since then.

To contact the reporter on this story: Yalman Onaran in New York at yonaran@bloomberg.net.

Last Updated: December 12, 2007 07:27 EST