Just over a week ago, Deutsche Bank staff were told their bonuses for 2018. Tomorrow, those bonuses hit their bank accounts. And then? They will be free to leave, sort of.
It's a prospect that is already causing excitement among headhunters. "I have several Deutsche people in play," says one London fixed income headhunter. As of tomorrow, the game becomes serious.
This being Deutsche Bank, however, and this being the era after the financial crisis, no senior bankers will get all of their bonuses in cash. Instead, a large proportion of 2018 bonuses will be held back in the form of restricted stock. Deutsche is particularly famous for deferring 100% of bonuses for its most senior staff for five whole years. - Staff on that package will get nothing in their bank accounts until 2024, although this in itself could galvanize an exit given that Deutsche share price has fallen 71% in the five years since 2014.
Whether their bonuses are deferred or not, some at Deutsche are quietly eyeing the door. "Morale is the worst it's ever been in equities at DB in New York," says one insider. "I can say with some level of certainty that the most likely scenario is a an exodus of talent followed by a reduction in revenue followed by layoffs followed by another period of overpaying to bring in outside talent and a continued circling of the drain," says another.
If 'talent' leaves, it would clearly be a bad thing. However, some at Deutsche suggest that any exits after disappointing bonuses and non-existent salary rises, are simply part of Deutsche's masterplan. "They want people who got no bump to leave on their own," says one insider. "Anyone who stays show the bank they are fine getting d*cked over and the bank will continue to underpay them. It’s genius really, find out who is both a top performer and also who is complacent enough to remain here."
One Deutsche investment banker in Europe expressed concern that he wouldn't be able to find a new job anyway. "The biggest shame is that there are individuals and groups that do well here," he said. "But other banks are reluctant to poach us as they think we might be bad apples like some senior managers."
Deutsche Bank declined to comment.
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