Steve -

As you requested, attached please find the Analyst compensation comparables 
we discussed last week:



We are having an extremely tough time recruiting Analysts from Rice because 
our main competition on campus comes from consulting companies (Bain, 
McKinsey, BCG, EY, Andersen, etc.) and investment banks (Goldman, JP Morgan, 
CSFB, Merrill Lynch, etc.).  Even though these companies are not directly in 
our industry group, they are our principal competitors for talent at Rice.  

As evidenced by our recruiting performance this year and in previous years, 
we loose nearly every time when we compete with these companies.    In the 
last three years of recruiting at Rice, only 1 or 2 people have accepted our 
offer.  The other Analysts who are rice alumni (myself included) joined Enron 
through other circumstances.

I think our poor performance at Rice is due primarily to the following 
factors:

Compensation:  The Enron compensation package  is below that of our 
competitors at Rice.  Additionally, there is more risk associated with our 
offer, since Enron's compensation structure relies more heavily on the year 
end bonus than some of our competitors.  In the cases where the package is 
similar (ie, McKinsey), we loose folks because of other company's name and 
prestige.
Rotations:  Most investment banks give their analysts offers to work in 
specific groups (M&A, Trading, Etc.).  Our analyst recruits can express a 
preference, but their placement is not guaranteed.    This also creates an 
added element of risk and uncertainty.

In sum, I think we will continue to be unsuccessful in our recruiting efforts 
at Rice if we do not address these issues.

Should you need any further information, please feel free to contact me.

Regards,

Alex Hernandez
ENA - Principal Investments
713-345-4059

---------------------- Forwarded by Alejandro Hernandez/NA/Enron on 
12/15/2000 03:31 PM ---------------------------


Alejandro Hernandez
12/15/2000 03:30 PM
To: Charlene Jackson/Corp/Enron@ENRON, Julie Braly/NA/Enron@ENRON, Jana 
Giovannini/HOU/ECT@ECT, Shelly Butler/HOU/ECT@ECT
cc: Brian Hoskins/Enron Communications@Enron Communications, David 
Hunker/ENRON@enronxgate, Priya Jaisinghani/NA/Enron@Enron, Carrie 
Southard/LON/ECT@ECT, Erin A Rice/LON/ECT@ECT, Julie Davidson/HOU/EES@EES 

Subject: Analyst Compensation Comparables



Charlene -

As we discussed yesterday, attached please find a comparable compensation 
analysis for this year's Analyst offers:



We believe that the low acceptance rate ( 14/112 ) we are experiencing this 
year is due to the following reasons:

Enron's base salary is significantly below that of our competitors
The bonus ranges were not mentioned in the offer letters

I hope this information is useful to you as we continue our efforts to 
attract quality employees to Enron.

Should you have any questions, please feel free to contact me.

Regards,

Alex Hernandez
Analyst Advisory Board
x54059