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Morning Coffee: What John Cryan really said about Deutsche Bank pay. When Goldman pays a crazy hourly rate

John Cryan bonuses

"Mr Grumpy." Or not.

It’s really happening. Deutsche Bank bonuses are really falling by around one third, as per the market talk in October 2015. We know so because Reuters has spoken to an anonymous Deutsche ‘manager’ who says this could be one of the “worst years ever” for bonuses and that divisional bonus pots at the German bank are down 25% to 30%.

The horror. Except, it’s worth remembering that bonuses are not the same as total compensation, and that on the subject of total compensation Deutsche’s new CEO John Cryan has been somewhat more sanguine.

In a message released on Deutsche’s investor relations website last Thursday, Cryan said the bank is putting “a new compensation framework” in place. He went on to say that the new framework, “will mean that some of you may receive lower variable compensation and correspondingly higher fixed pay from 2016 onwards.” – In other words, that bonuses will henceforth be lower, while salaries will rise to compensate.

Does this mean that concerns over Deutsche’s bonuses are overblown? Not exactly, – Deutsche’s new bonus rules won’t apply to last year’s bonus pool, and with Deutsche booking a $7bn loss for 2015 it’s hard to see how this can be anything other than disappointing. However, Deutsche’s investment bankers can at least take consolation in the fact that it won’t be long before they get a salary increase to help compensate for all future bonus misery. – The only danger being that this salary rise will be calibrated in terms of 2015’s already-diminished bonuses and that Deutsche’s bankers will have their pay re-based to a lower level for evermore…

Separately, a whole new record has been set for hourly pay at Goldman Sachs. Regulated staff at the firm in London receive around £700 ($1,010) an hour in total compensation, Lloyd Blankfein receives around $5,700 an hour. Ex-deputy British prime minister Nick Clegg earned around $9k an hour when he gave a Goldman-sponsored speech on Europe. But this is all nothing compared to Hilary Clinton. The Huffington Post reports that Goldman Sachs has been paying Clinton around $200k an hour to speak to its staff. Unfortunately. Clinton laughed-off attempts to elicit what she said for this sort of fee.

Meanwhile:

John Cryan is known as “Mr. Grumpy” in Deutsche Bank. (Handelsblatt)

Don’t blame John Cryan for the state of Deutsche’s investment bank. Blame Anshu Jain and Josef Ackermann. (Spiegel) 

On average, London bankers expect their bonuses to rise £2,301 to £24,461. (Financial Times) 

Another reason why it makes no sense for HSBC to move to Hong Kong: it won’t benefit from the low tax rate anyway. (Reuters)

Kareem Serageldin, a former senior trader at Credit Suisse who inflated the value of his trading positions to receive a bigger bonus will be released from federal prison in March. (NYTimes)

Goldman’s returnship programme only runs in New York City and Mumbai right now. That’s about to change. (Huffington Post)

UBS is rolling out its Singaporean training programme for high net worth client advisors globally. (Straits Times)

At 8.5 times median incomes, London house prices are not too bad relatively speaking. In Hong Kong they’re 19 times higher. In Sydney they’re 12.1 times higher.  (Financial Times) 

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