Morning Coffee: Bonus Structure May Cost Barclays Top Bankers
If Barclays doesn’t allocate more bonus money to its thriving U.S. mergers and acquisitions division, the firm could see many of its top investment bankers head out the door.
I-bankers at Barclays had the cash portion of their bonus capped at just over $100,000 last year, upsetting many within the group, and forcing some to borrow cash from the firm against their deferred compensation just to continue financing their lifestyles, a source close to the situation told eFC.
“We were told last year to wait and see” whether cash bonuses would continue to be restricted, said the source. “If we don’t see them this year, it will be ugly.”
A firm cash-cap on bonuses this year would likely go over worse than in 2011, considering the group’s strong performance. Barclays’ M&A business has grown 17% through the first three quarters of 2012 compared to the same period last year, with roughly two-thirds of the fees generated by the Americas group. On average, M&A fees fell by 21% among the top 10 investment banks during the first three quarters of the year.
“My hunch is [Barclays] can’t do anything about it,” said one recruiter who works with the firm. “My hunch is people start leaving.”
The exodus may have already begun. Reuters reported that three of Barclays top technology investment bankers from New York have left the firm to join unnamed rivals.
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UBS is now expected to be fined as much as $1.6 billion for its role in the Libor scandal. Earlier reports suggested that the settlement would be less costly.
RBS on Deck (The Sunday Times)
The Royal Bank of Scotland isn’t expected to be on the hook for quite as much. RBS is negotiating a settlement for its role in the Libor scandal that likely won’t exceed $570 million.
Private equity firms are back to their old tricks, funding acquisitions through mountains of debt.
Age Discrimination (Financial Times)
A 55-year-old former top Credit Suisse analyst is set to sue his former employer for age discrimination.
Steven Cohen, founder of SAC Capital Advisors, has not been charged with any crime related to the insider-trading probe into his firm. But links between him and those central to the case keep popping up.
Unemployment Threshold (Bloomberg)
It may take as long as three years for the unemployment rate to drop below 6.5%. That means three more years of heavy stimulus, and three more years of rock-bottom interest rates.
Morgan Stanley has been fined $5 million by the state of Massachusetts for its role in the botched Facebook IPO.
Buzz Around the Office
The horrifying events that occurred in Newtown, Connecticut last week are a sobering reminder that evil is ever-present in our world. Here are 26 reminders that there is plenty of good out there, too.
List of the Day: Unmanageable Expectations
With workforces stretched particularly thin, receiving unreasonable deadlines is all-too-commonplace. Here’s how to deal with them.
- Discern whether the project is difficult or unreasonable.
- If the work is unmanageable, don’t wait to address it.
- Offer explanations, not excuses.
