Deutsche Bank's bonuses are bad, but some are ok with that

Deutsche Bank's 2019 bonuses have been revealed. While the letters are going out today, the announcements seem to have happened yesterday. Not every one is happy.

We asked Deutsche bankers to rank their bonuses on a scale of 1-10, where 1 is very bad and 10 is very good. Several responded that this year's bonuses were "a 1." There are complaints of zeroes, cuts of 50% and of being paid flat on last year - even when last year's bonuses weren't great and performance this year was better. 

The disappointment comes after months of 'expectation management' in which it was flagged that Deutsche's bonuses could be down by 30%, maybe more, in the investment bank. The overall DB bonus pool is understood to be down by 20% but some of those licking their wounds today say cuts in the investment bank seem much deeper. "If the pool is down 20%, if management have taken a 50% pay cut and the employee base is smaller, then we should have been paid better than this," complains one DB insider. "The numbers just don't add up to this kind of dramatic reduction," he adds.

Complaints seem spread between business areas, with Deutsche's equity researchers, rates traders and quants all expressing disappointment. Despite closing its equities business in July, Deutsche retained equity research staff to help support is equity capital markets business. One DB equity researcher said his bonus been cut by 50%: "This is management sending a signal that the department will close as profits are unjustified to keep the unit open," he suggested. An equity research headhunter said he hadn't heard of anyone else with a similar cut at DB and that equity research bonuses across the street were down by around 20%.

Deutsche Bank declined to comment on its bonus pool. However, some insiders at the bank said the complaining is to be expected. "Has anyone ever not complained?," said one senior DB trader. "We booked a large loss and there have been 100k+ layoffs across the industry - what did people expect?," he added. 

A recently ex-Deutsche Bank MD said the big bonus cuts are unsurprising. "The management board waived a large part of their variable compensation and it was a bad year. As Deutsche Bank tries to keep costs under control and many parts of the bank show weak performance it's hard to argue for high bonuses. It's really tough."

Some at the bank do seem to have been paid ok though. The electronic equities and prime broking people at Deutsche who are moving to BNP Paribas appear to have been protected by a prior bonus deal. And insiders say strong performers in rates trading were paid up. "They've punished directors and non-superstar MDs, but other people did ok," says a source close to the bank.

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