Deutsche Bank equities traders are particularly paranoid about their pay

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If anyone's going to be underpaid at Deutsche Bank for 2018, it would seem to be the bank's equities salespeople and traders. Revenues in Deutsche's equities division fell 15% year-on-year in the first nine months of 2018, even while other banks (JPMorgan, Goldman Sachs, Bank of America, Morgan Stanley, UBS, Barclays, Citi...) achieved double digit percentage increases. With Deutsche said to be cutting the bonus pool by 10%, at least, its underperforming equities salespeople and traders surely deserve some of the lowest bonuses in the front office?

Deutsche isn't commenting on its equities bonuses - or indeed saying anything about its bonus pool at all - but one trader based at DB in New York says the suggestion that bonuses will be cut by 10% has been greeted with relief on the U.S. equities floor: "We were expecting cuts to bonuses to be much larger than this." A trader at a rival firm says he's already been approached by various DB U.S. equities traders who are looking for new jobs because they're expecting their bonuses to be zero for last year.

If DB's equities bonuses are indeed better than expected, the bank's traders could have Peter Selman, the head of Deutsche's equities business to thank. Unconfirmed reports suggest that faced with a particularly miserly bonus pool for 2018, Selman petitioned for an increase in the amount allocated to his division. "The equities bonus pool has been sent back several times as Selman has pushed back up the food chain for more money," says one insider. "- I'm not sure how successful he's been."

Speaking off the record, a New York headhunter says Deutsche's U.S. equities staff are nervous about recent big hires to their division, which they think may have reduced the bank's appetite to pay bonuses to existing employees. In October, for example, Deutsche hired James Rubenstein from UBS as head of electronic equities.  Nor does it help that Deutsche Bank is said to have made a $60m loss on its U.S. central risk book in the fourth quarter.

Apprehensive DB equities people are looking for alternatives. The headhunter says he's had several calls from juniors who've "accepted they're not going to get paid," while more senior staff still seem to think they'll be rewarded for their loyalty. "My gut says that aside from one or two key people, the rest will be disappointed," he says.

With most other banks coming off a good year for their equities businesses, DB's dissatisifed people could find alternative employment elsewhere. Wells Fargo seems to be hiring: it added Chip Clingham as head of U.S. equity execution sales in December. 

Even if bonuses are down a mere 10%, the danger for Deutsche is that dissatisfaction will be widespread. "It's particularly galling here as U.S. banks are guiding that their bonus pools will be up 10-15%," says the NY trader.

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