Is BNP Paribas taking perverse pride in paying extremely badly?

17 February 2010

2 minute read

Is BNP Paribas taking perverse pride in paying extremely badly?

When Alain Papiasse, head of the corporate and investment banking was interviewed by Euromoney recently, he advised his employees to be ambitious, but not to 'dream.'

Today, it appears that BNP bankers' dreams of large bonuses have been rudely shattered.

The bank has proclaimed a "new willingness to exercise restraint", which appears to go several steps further than any other bank that has reported so far.

BNP has cut its 2009 compensation ratio for the corporate and investment bank to just 27.7%, the lowest anywhere apart from Deutsche Bank at 26%. However, while most other banks haven't booked the deferred element of 2009 compensation in last year's compensation costs, BNP has added in all deferred comp - even if it's not paid until 2013. This implies that the cash compensation ratio at BNP's corporate and investment bank is considerably lower than at any of its near rivals.

Even allowing for this, pay per head at BNP Paribas's corporate and investment bank appears miserly at an average of €197k, compared to €347k at Deutsche's corporate and investment bank.

BNP's traders appear to be being paid slightly better than the mass of its other CIB employees. It was reported separately that 4,000 'traders' at BNP are being collectively paid €500m in cash bonuses, with a further €500m deferred.

This implies that BNP's highest earners can expect €125k now and €125k later. However, even this looks low compared to the (possibly spurious) figures for trading compensation derived from our recent survey.

AUTHORSarah Butcher

Global Editor

Wh
Whatajoke
8 March 2010
Coco can you help me do what you did?
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Eagle5
18 February 2010
BNPP is ruled by "enarques" (from French public servants school ENA) and has a strong culture of "fonctionnaires" (ie public servants, with "syndicats", "comités d'entreprises", "ancienneté", RTT, the whole shebang of French inefficiency). For most employees, their salary grid in France is extremely rigid and primarily based on (i) the school you studied in and (ii) the number of years spent with the bank ("ancienneté" -- think public service), but gives little importance to performance or personal skills.
BNPP has never had the ambition to be a leading investment bank... Their business model is to be a large retail bank, with strong corporate commercial lending, and some investment banking / capital markets, but marginally. Every time the IB grows to represent a large part of the results, BNPP acquires a retail bank to rebalance towards retail.
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Co
Coco
18 February 2010
Simple rule, if you are good at what you do and you want to be paid well (atleast at par with the rest of the market)...Paribas is not the place for you. Most of the people there are there because they dont have what it takes to get a job in a tier1/2 bank.
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seasurfer
18 February 2010
What a shame...
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Ch
Chickens coming home to roost
18 February 2010
BNP Paribas is a rigid structure ruled by bureaucrats and which, in my opinion, only owes its recent success to a conservative risk strategy. It's a good place to work if you're midlle-aged or nearing retirement as the bank offers good benefits, but if you're young, ambitious or want progress in your career, then I'd say you had better stay away. Trust me.
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