Emmanuel Macron may be good for Paris's chances as a financial centre but he doesn't seem much good for SocGen's share price. Stock in the French bank is down 3% this morning to approximately the same level it was at before SocGen revealed its strong trading performance last week. But if people aren't leaving SocGen, it's not because they're waiting for stock tied up in deferred bonuses to pick-up. - It's because they can't. They're tied in.
While most other banks in the City of London have a three-month notice period for staff who quit, SocGen's notice period is five months. This has been the case for senior traders since at least 2006, but headhunters say the French bank extended the policy to apply to everyone in 2012 and has begun policing it more ruthlessly of late.
"SocGen's the only bank with this long notice period for everyone down to analysts and associates," says one fixed income headhunter, speaking on condition of anonymity "Not even BNP Paribas has a five-month wait. It always becomes an issue when banks are trying to hire from SocGen."
As originally conceived, SocGen's policy was intended to stop its senior trading talent leaving. The French bank has long been a nursery for excellent financial mathematicians, who make the most of its training before leaving for higher paid roles at American and other European banks.
This year, however, headhunters say the ubiquity of SocGen's long notice periods have had the effect of tying-in disaffected juniors. "SocGen didn't pay well in the last bonus round. And nor did they pay well in the two bonus rounds previous to that," says the headhunter. "The strict retention period has turned into a way of locking people in after paying below market."
Although SocGen's made some big hires in the U.S., it's also in the process of cutting €220m in costs from its investment bank and might therefore welcome voluntary exits of expensive senior staff. Niamh Whooley, its director of equity research for equity, social and governance investing left last month. Pierre Kervella, its former head of delta one trading and deputy head of securities finance left in November. Maxime Kahn, one of its top traders and a former head of equity flow trading, left last September. Kahn is thought to be joining a hedge fund, but has yet to resurface. Kervella and Kahn's LinkedIn profiles both say they're on gardening leave - but this has been going on for seven and nine months respectively.