Morning Coffee: Bonfire of the 29 year-old bankers' bonuses, except here. Signs you're on the way out
If you're a vice president (VP) in an investment bank today, you're supposed to be special. In the current climate of 'juniorization', 29 year-old VPs are supposed to be the new managing directors (MDs). It's unfortunate, therefore, that any increase in VPs' responsibilities has not been matched by an increase in VPs' bonuses. - In fact, just the opposite.
New data on bonuses from Emolument, reported in CityAm and elsewhere, says VPs' bonuses actually fell in 2015. - They didn't fall as much as bonuses for directors, but they fell a lot more than bonuses for MDs. Emolument's data, from 2,500 front office employees working in the UK for JP Morgan, BAML, Citigroup, BNP Paribas, Credit Suisse, Morgan Stanley, Barclays, Deutsche Bank and RBS, suggests the only people to get paid up in the 2015 bonus round were analysts (up 150%) and associates (up 21%). Elsewhere, shriveled bonuses were pretty ubiquitous.
One bank does seem to have received the message that VPs are valued, however. That bank is Citi. Emolument's data suggests that Citi awarded its VPs median bonuses that were up 4% last year. Given that Citi already paid its VPs very well and that other banks (like J.P. Morgan) cut VP bonuses for 2015, Citi is suddenly the most lavish bank when it comes to doling out performance related pay to 29 year-olds, by a long-shot.
Needless to say, however, for bankers in London bonuses are now only part of the story. Following EU rules restricting bonuses to 200% of compensation, most banks have hiked salaries or introduced role-related allowances. Who cares that bonuses are flat when salaries are up 40% (as is allegedly the case at Deutsche Bank)?
Separately, there is another manifestation of the inadvisability of making an "internal move" out of your comfort zone. Financial News reports that Wayne Felson, former co-head of fixed income trading at Deutsche, is leaving the bank. Since stepping down from his fixed income role at the start of 2014, Felson tried working in Deutsche's trading and technology and fund services arms. Neither role lasted. You know you're on the way out when you stop doing what you've always done and start trying out whole new areas instead.
Deutsche Bank says all banks had a bad first quarter. (Reuters)
Credit Suisse plans to dismiss 163 workers in New York. (Bloomberg)
BNP Paribas is going to start using US banks' job titles. (Financial Times)
Citigroup's global head of spot FX trading Richard Bibbey has resigned. He was promoted to his role in March 2014. (Reuters)
Bank of America fired at least 15 senior bankers at its investment-banking unit in Asia last week. (Bloomberg)
George Osborne wants to raise an extra £6bn from the bank profit surcharge. (Sunday Times)
LIBOR trader Tom Hayes is still worth £3.8m, but the courts are trying to seize his assets. (Reuters)
The more money a household earns, the more satisfied they are with life. (SamuelWBennett)
Hedge fund paid Ken Livingstone £8k to entertain its clients. (ITV)
"Ideas dinners" have become a thing among hedge funds. (The Times)
Hedge funds are hated and wish they weren’t. (Independent)
The angst of the ex-lawyer looking for meaning. (Medium)
You pay for a degree; you're no longer special; and it's worth less. (Twitter)
Teaching machines to detect sarcasm. (ScholarWorks)