Federated sees costs from new employment pacts

PHILADELPHIA (Reuters) - Federated Investors Inc (FII.N) said on Friday it recorded a charge in the fourth quarter due to the cost of employment contracts for three employees from the previously acquired Edgemont Asset Management Corp.

The contracts for Hans Utsch, Lawrence Auriana, and Peter Lerner runs through December 31, 2014. Utsch and Auriana are portfolio managers for the Federated Kaufmann Fund, the Federated Kaufmann Small Cap Fund and the Federated Kaufmann Large Cap Fund, Federated said in a filing with the Securities and Exchange Commission.

In addition to the base salary and bonuses, the agreements include a payment of $15 million to these employees by January 29, 2008. The expense was recorded in Federated's fourth quarter earnings as an expense of about 9 cents per share, the filing said.

An additional $26.5 million is expected to be paid to these three employees and to other Federated employees managing the Federated Kaufmann products over the next four years, the company said.

(Reporting by Jessica Hall, editing by Leslie Gevirtz)