While most banks might be quite happy to lose a few people to competitors in the current circumstances (thereby relieving them of the need to make expensive redundancies), the same cannot necessarily be said of Deutsche Bank.
Deutsche only reduced its corporate and investment banking headcount by 429 people last year, and has announced its intention of seizing market share from more cost-constrained competitors. It was also the big hirer in London in January.
Unfortunately – therefore - for Deutsche, various headhunters report that many of its London investment bankers are about to become more than usually prepared to move on as they cash out of most of their comparatively generous 2009 bonuses.
“Senior people at Deutsche seem to have big amounts vesting this year,” claims one equity derivatives headhunter. “There are a lot of Deutsche bankers coming off their 2009 bonuses,” agrees the head of a fixed income search firm. “They’re more willing to move as they’re leaving less on the shelf.”
Deutsche’s 2009 compensation report suggests 50% of its 2009 bonuses vested at 24 months, with another 25% vesting at 36 months and 48 months. In 2009, the bank paid an average of €357k per head in its corporate and investment bank.
On one hand, this doesn’t seem overly generous compared to the €372k Deutsche paid in 2010. On the other, some at Deutsche’s investment bank were said to be very unhappy with their compensation last year, suggesting the 2009 package may have been more worth sticking around for.
Another headhunter says Deutsche’s bankers will be able to cash out of a chunk of stock mid-March, and may be willing to move after that. However, he says this applies equally to most other banks with three year vesting, where the generous amounts deferred from 2009 are all becoming inconsequential.
Following last year’s tantrums about the size of Deutsche’s bonuses, this headhunter also says some senior people at the bank were given special retention payments vesting in 2013. This may encourage a few of them to hang on a little longer.