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Delayed bonuses bode badly at Deutsche Bank

Deutsche and Barclays bonus delays

Things are deteriorating ahead of European banks' bonus announcements

In any normal year, bankers at Deutsche Bank would be readying themselves to learn their bonuses now – Deutsche typically announces in early February. This, however, is not a normal year.

CEO John Cryan declared his intention to delay bonuses by a month in a memo to employees last October. 

That’s unfortunate. Although shares in Deutsche Bank have risen 10% this morning, they’re still down 30% since January. Moreover, 2016 isn’t panning out as well as expected in terms of revenues. As Morgan Stanley’s head of trading, Edward Pick, said this week, ““The year started out OK, but it’s been a lot choppier since.”

In other words, the longer 2016 goes on, the greater the incentive for banks that haven’t already announced bonuses to quietly cut their allocations.

“The reality this year is that the earlier you were paid, the better,” says the head of one M&A search boutique. “As time goes on, numbers are being ground down as the market deteriorates.”

With US banks already announcing bonuses in mid-January, headhunters in London say the contrast between payments at US banks (Goldman Sachs, J.P. Morgan, Citi and BAML) and European banks is likely to be particularly stark this year. BNP Paribas, SocGen, Barclays, RBS, and HSBC have also yet to inform staff of their numbers. As we reported in December, Barclays is said to have delayed the announcement and payment of 2015 bonuses until March this year, although announcements will take place later in February as usual.

M&A boutiques have also yet to inform staff of their payments. Some, such as Gleacher Shacklock, are rumoured to be paying later than usual.

A partner at one M&A boutique in London said later payments are standard in the boutique sector: “We’re a price taker, not a price maker. We want to see what everyone else is paying and to make sure we’re not offering more than elsewhere.”

Photo credit: NA/Ablestock/Thinkstock

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