Headhunters say DrKW equities staff want out

Several headhunters say equities sales and trading staff are eager to jump ship at Dresdner Kleinwort Wasserstein (DrKW).

"We've had calls from numerous people wanting out from DrKW's equities division," says an equities specialist at one international search firm. "People there are pretty annoyed."

The source of the irritation is said to be poor and deferred bonuses. Earlier this week, the Financial Times reported that as much as 50% of last year's bonuses in DrKW's equities division had been deferred until 2007. But recruiters say this is only half the story.

"Two thirds of bonuses have been deferred until next year," says one headhunter. "And even then they're not guaranteed - people need to reach fairly ambitious targets to get the money."

"The revenue targets are based on the assumption that the whole team will be place," says another consultant. "This seems fairly unlikely given that so many people want to leave."

DrKW's equities salespeople and traders are also said to be concerned about reaching the targets following a tightening of the bank's risk framework in the third quarter of 2005.

Following losses in the proprietary trading in the second quarter of last year, Steve Bellotti, head of capital markets at the bank, ring-fenced proprietary trading activities in a new macro and relative-value trading group, and placed stricter limits on the risk taken by the rest of the trading business.

"People at DrKW think it will now be more tricky to make money," says a headhunter. "They want to go to house where risk is less rigidly controlled."

Recruiters say DrKW is the only bank to have linked deferred bonuses to the achievement of revenue targets, and that discontent in the equities division exceeds that at other banks. The move to clamp down on trading risks at DrKW follows an increase in risk taking at many other banks - at Goldman Sachs, for example value at risk (VaR) rose 4% last year.

A spokeswoman for DrKW declined to comment.