Deutsche Bank's top traders each lost around $277k in deferred bonuses this year

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These are not good times for the senior traders and top bankers at Deutsche Bank. With the German bank's share price at an all time low, their deferred bonuses are dwindling fast.

At the start of this year, Deutsche Bank paid deferred bonuses worth €442 million to 984 material risk takers in its corporate and investment bank (CIB). Since then, the bank's share price has gone from €15.88 to €8.6. With the declining share price, the average value of the 2017 deferred bonus paid to its material risk takers (bankers, traders and senior compliance staff) has declined by €243k ($277k) in just eleven months.

If this weren't painful enough, Deutsche's top traders and bankers can't dump their fast-shriveling DB shares, or even hedge against them. Material risk takers at the bank have to wait until March 2021 before they can offload any of their shares. At this point they can get rid of 50%, with the next 50% vesting in 2022. All other DB employees are in a slightly better position, but not much: they had their 2017 bonuses deferred until 2021, with 25% vesting each March until that date.

The diminishing value of last year's bonuses will not contribute to morale at Deutsche, where there are fears for another round of redundancies before bonuses are paid in 2018. Some at the bank suggest co-heads will be in the firing line. Although CEO Christian Sewing promised to cut back on co-heads when he was first appointed earlier this year, many businesses at the bank continue to maintain this structure. For example, Deutsche's EMEA corporate finance business has been run by Adam Bagshaw and Nick Jansa since the exit of Alasdair Warren as head of EMEA corporate finance in June. M&A revenues at the bank fell 25% year-on-year in the third quarter. "It's fine having co-heads while the LBO business looks healthy, but that's at the top of the cycle right now. - What happens when the business swings down?," says one DB insider.

In the meantime, Deutsche's disgruntled bankers can at least take solace in the fact that senior executives are suffering similarly from the declining share price. CEO Christian Sewing received around €2.8m in deferred equity awards for last year, and has himself lost €1.5m since January.

Bankers at rival firms have also been hit by declining stock prices, but their pain is less intense. Morgan Stanley's shares are down 16% since the start of the year, Goldman's are down 21% and UBS's are down 24%, for example.

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