Is it just us, or is there something fishy about Lehman’s 26 percent quarter-on-quarter increase in compensation expenses?

Given the bank’s unlikely to be putting cash aside for generous 2008 bonuses, the increase announced last week is almost certainly down to redundancies.

Officially, though, Lehman’s only announced cuts to 5 percent of staff in the past few months, although the bank's Q2 results show a 6.7 percent cut of 1,899 people since the end of February.

In London, one ex-Lehman senior banker says rising comp costs are down to expensive severance packages paid to the likes of Roger Nagioff (although the fact Nagioff left in early Feb seems to make it unlikely that he contributed to the Q2 lurch).

Other known exits include Guy Batchelor, an executive director in sales and marketing, a handful of junior financial sponsors, and 30-40 bankers in Asia, including some senior leveraged financiers.

Our source says the bank has also let go of some lesser known senior staff in London.

Brad Hintz, an analyst for Sanford Bernstein and ex-Lehman CFO, says the firm's made swathing cuts to its analyst and associate classes: “You’re seeing large groups of cheap people go out the door, which is unusual at this stage of the cycle.”