Morning Coffee: Lean, mean Deutsche bank dangles big pay to attract and retain staff. Senior banker seems to accept buy-back
It's a whole new world at Deutsche. The German bank, which is under new management, has begun blaming its recent feeble performance on a preponderance of poorly-performing staff, whom it's now committed to getting rid of.
Mark Fedorcik, the newly-promoted co-head of Deutsche Bank's U.S. operations, has been giving interviews setting out Deutsche's new ruthlessness, which he says is welcome to the bank's U.S. employees.
People who remain at DB should feel encouraged by the overhaul, Fedorcik told Bloomberg: "You’ve got to make decisions to shrink where you’re not efficient.” Deutsche is going to be more like Goldman Sachs, Fedorcik told the Financial Times: it will be “doing a much better job on a systemic basis at looking at the underperformers.” This is to be embraced: “People want to be focused, they want to see the bottom performers taken out," he added.
How many bottom performers are there at Deutsche Bank? Previous suggestions that Deutsche will be cutting 20% of its U.S. staff appear to have been overdone. 'People familiar with the bank's plans', told the FT that 10% of the bank's remaining 9,900 U.S. staff (400 have been cut already) could go in a cull. Thereafter, the feeble will be weeded-out at a rate of 5% per year.
Whilst hacking away at its flabby underbelly, Deutsche will be selectively adding muscle to its U.S. business. Last year, Deutsche hired-in over 30 managing directors (MDs) from elsewhere. This year, Fedorcik says it will be hiring,"here and there." However, the FT notes that people will likely require a significant financial inducement to join DB's U.S business in these uncertain times, and quotes a recruiter who says the bank's already been offering, "aggressive compensation packages to recruit people.”
Fedorcik also suggests that Deutsche will also be waving its cheque book at high-performing staff whom other banks want to poach. “We will defend them to make it almost impossible for them to leave,” he told Bloomberg.
Lean, mean - and high paying.
Separately, following, our article last week from a recruiter intoning people never to accept buy-backs, Deutsche Bank doesn't seem to be the only place offering them. Business Insider reports that Tammy Kiely, a top semiconductors banker at Goldman Sachs who was going to be joining Morgan Stanley, has changed her mind and will be staying at Goldman Sachs after all. It's not clear what made Kiely stay, but it's fair to assume that Goldman really didn't want to lose her.
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