Rumblings continue about Deutsche Bank's efforts to persuade around 200 of its most senior managing directors (MDs) to relinquish a month's salary entirely of their own volition.
CEO Christian Sewing announced the salary sacrifice policy in a conference call last Thursday, where he tried to sell it to Deutsche's top MDs as an "opportunity" to be part of an "initiative" that reflects Deutsche's "entrepreneurial spirit and discipline." Yesterday, insiders say an email was sent to the MDs on the list asking them whether they're in or out, and to fill in a form if they're in.
Deutsche isn't commenting on the scheme, but there are indications that plenty of those 'invited to volunteer' are unhappy about it. Some insiders have suggested that the scheme may be delayed as result.
Deutsche's senior bankers in the U.S. are said to be especially disgruntled with the proposal. - A month's salary can be particularly substantial at DB in New York, which has skewed its compensation away from bonuses and towards fixed pay in an attempt to attract people. One New York based MD at Deutsche is on a salary of $1.8m, for example, and would be giving up $150k (gross) under the scheme.
While $150k might seem a drop in the ocean for someone earning $1.8m, people at DB don't see it that way, particularly if they're on - say - rates trading desks which had an excellent start to the year. Disgruntelement is compounded by the fact that the senior MDs being asked to give up a month's salary are precisely the same Deutsche Bank people who have 100% of their bonuses deferred for a full five years. Given that Deutsche's share price fell 72% between 2015 and 2020, it's easy to see why salaries are important to them.
It also doesn't help that traders in London and New York are divorced from the sensibilities of senior management in Germany, who want to make DB the “Hausbank" for German companies and to be seen standing shoulder to shoulder with struggling German corporate and retail clients at this time.
In its most recent compensation report, Deutsche Bank said it benchmarks its pay against nine rivals: Bank of America, BNP Paribas, Barclays, Credit Suisse, Citigroup, SocGen, JPMorgan, HSBC and UBS. None of them have implemented a similar salary sacrifice scheme - and instead, Citi gave all its people a day off last Friday. "The negative effects on morale from this will be far greater than any savings," said one DB insider.
The move comes as Deutsche has also invited employees to spend €80 on some Deutsche Bank branded shoes. Last year, it invited them to spend $20 on a commemorative book.
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