When is promotion to managing director less of a charm than a chore? How about when it comes with an effective 'bonus tax' which sees your variable compensation cut, if not eliminated, following your promotion.
Headhunters in London say this is what happened at Deutsche when the German bank promoted its new round of MDs last month.
"It's like there's an MD tax at Deutsche," says one, speaking off the record. "When you're promoted to MD, you're expected to take one for the team. At Deutsche, accepting a lower bonus has almost become a sign that you're MD material."
In some cases, recruiters say newly promoted MDs at Deutsche Bank were rewarded with zero bonuses when the bank announced its compensation a few weeks ago. Members of Deutsche Bank's executive board have had their bonuses cancelled for 2015 after the bank made a €6.8bn loss and the Financial Times reported in January that senior staff would be punished at bonus time to pay juniors.
Deutsche Bank declined to comment on the allegations. The German bank has said it will increase salaries to compensate for any bonus cuts, but recruiters say the hikes have yet to reach MD level. Most MDs at Deutsche are said to be on salaries of £250k to £300k, with a few divisional heads said to be on more.
The 'MD tax' at Deutsche coincides with the introduction of the new senior manager regime in London. This makes senior bankers officially accountable for all that goes in their teams. Unless senior managers can prove that they took all reasonable steps to avoid wrongdoing, they are liable to be fined or banned from the industry in the event of a transgression. At the same time, most banks now automatically categorize managing directors at 'material risk takers' to whom European bonus rules apply. Bonuses for MRTs are typically more heavily deferred than those for everyone else.
Suddenly, promotion to MD doesn't look so appealing after all.