The bear market has reached Valley Forge, Pennsylvania. Crewmembers at Vanguard learned last week that they would be getting smaller bonuses this year than last. CEO John Brennan delivered the news at the fund firm's annual company picnic, according to the Philadelphia Inquirer. A Vanguard spokesperson would not comment on the report other than to confirm the prices of the Vanguard partnership units on which the bonus is based.

"The past three years tested us more than any of us thought we could have been tested," Brennan reportedly said at a company picnic Tuesday. He added that he expects quality initiatives at the firm to drive profits and the bonus higher in 2004.

The price of those units dipped five percent to $58.40 per from $61.50 last year. The units debuted in 1984 at $3.84. The price of the unit is based financial performance at Vanguard over the past three years and additional items such as cost savings at the firm, according to the Inquirer.

Employees may not have been too disappointed by the news. While Vanguard has been cutting its headcount through attrition, according to industry sources, it has yet to resort to layoffs. That means it has managed to sidestep a fate that even rival Fidelity -- also privately owned -- has suffered through.

The partnership units themselves have created wealth for many at Vanguard. Brennan himself noted that the units have outperformed the S&P 500 since their debut with a 1,420 percent return.

Crewmembers may also be able to save some cash on their wardrobes. The report adds that Brennan will allow them to wear casual clothes to work from July 4 through Labor Day as a celebration of the firm's better performance since the market turnaround of the past three months. 

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