All is not well over at Harewood Avenue. BNP Paribas bankers have been informed of their bonus terms and it seems they're not very favourable.
According to insiders and headhunters, BNP is paying little or nothing in the way of cash and is deferring all or most of this year's bonus as stock to be paid in four tranches between June 2009 and 2012.
Even worse, the stock is subject to a clawback depending upon the bank achieving specific returns on equity during the vesting period. And even worse still, said returns on equity are said to be 18%.
BNP Paribas declined to comment.
A headhunter said a lot of people at BNP are not very happy with the new arrangements. "It seems to be very much heads you lose, tails we'll alter the rules. They don't seem to have anything in writing and management aren't communicating very well."
BNP's move may have something to do with the French government's 'code of ethics' which says that French banks should receive a substantial proportion of their bonuses in stock options rather than cash and that bonuses should be deferred, sometimes for several years, in order to evaluate traders' positions over a period of time.
One BNP insider said cash is most definitely being paid at junior levels.