GUEST COMMENT: A trader needs to know his value
In the relationship between a banker and his managers, the most important moment of the year is the annual assessment each December. No matter whether you work in the middle, back, or front office, everyone has a right to this event. This doesn't mean, however, that the process is always the same.
For non-traders, the annual assessment is a purely qualitative affair. There's a discussion of what works, and what doesn't. The employee's concerns are taken into consideration - is he likely to move jobs, does he want promotion? Objectives are fixed for the year to come. The manager will discuss the potential for salary increases the following February or March, as well as the bonus. When I was a trading assistant the most I ever got was 15k euros.
However, for a trader and his managers, the assessment isn't a purely qualitative affair. It's far more about quantitative measures. The trader will submit a written document in advance, which serves as the basis of the discussion. This includes details of P&L, difficulties encountered, and qualitative objectives for the following year. All questions need to be addressed with frankness.
The crucial moment in a trader's assessment comes at the end, when the manager will ask, "What are you expecting as a bonus?" When I was asked this, I was taken by surprise: I had no idea what to expect.
There was a simple reason for this: bankers are forbidden from communicating about their bonus. Juniors are kept out of the loop. Amounts circulate on the grapevine, but they're often wildly out of touch with the reality. Based on my seniority and position in the hierarchy, it was a while before I had an idea what I should be asking for.
When the question was first posed to me, therefore, I could only think of one honest response: "I really don't know." My managers' response was another surprise: "A trader should know how much he's worth."
Jerome Kerviel is author of, L'Engrenage, Mémoires d'un trader, published in May 2010, from which this short extract is taken.
