Dec. 13 (Bloomberg) -- Lehman Brothers Holdings Inc.'s 2007 bonus payout, the first reported by a Wall Street firm, rose almost 10 percent from last year as revenue gains through August overcame a fourth-quarter decline.

Compensation, including salaries, benefits and bonuses, climbed 9.5 percent to $9.5 billion from $8.7 billion a year earlier, the New York-based company said today in a statement. Bonuses typically account for about 60 percent of compensation, or $5.7 billion compared with 5.2 billion in 2006.

Lehman, the fourth-biggest U.S. securities firm by market value, boosted 2007 revenue by limiting losses from subprime mortgage-related securities and lifting income from fund management, equities and investment banking. The firm said earlier this week that Richard Fuld, Lehman's chairman and chief executive officer, was granted a $35 million stock bonus for 2007, up 4 percent from last year.

``There were many divisions that made a lot of money and they made a lot of money all year,'' said Jeanne Branthover, managing director of Boyden World Corp., an executive recruiter in New York. ``These firms have to keep their talent and they have to do it by paying.''

The company's average pay per employee fell slightly in 2007 as Lehman added workers at a faster rate than it increased compensation. Salary, benefits and bonuses per person dropped to an average $332,470 from $334,246 a year earlier, as the number of employees rose 10 percent to 28,556 from 25,936 a year earlier.

`Out Of The Gate'

Lehman said today that 2007 earnings rose 5 percent from a year earlier as gains in the first three quarters overcame a 12 percent decline in fourth-quarter net income. While Goldman's full-year profit is also expected to rise, with analysts estimating a 20 percent jump, profit is expected to fall 22 percent at Morgan Stanley and 59 percent at Bear Stearns Cos., depressed by losses related to subprime mortgages.

Lehman, ``being the first out of the gate, is signaling to the rest of the market that it is willing to pay aggressively and now other banks will have to follow to compete for talent,'' said Michael Karp, chief executive officer of Options Group, a recruiting and consulting firm in New York. ``It's going to get very competitive in early 2008 as banks balance declining profits with retention issues.''

Goldman, the biggest securities firm, is the only firm other than Lehman that's expected to report an increase in 2007 revenue, compensation and profit. Lloyd Blankfein, Goldman's chairman and CEO, may receive $70 million this year, up 30 percent from $54 million last year, the Financial Times reported today, without citing its sources.

To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net.

Last Updated: December 13, 2007 11:54 EST