Compensation

Bill Gross set to blow again in 5…4…3…2… Read more »

Deutsche Bank reduced salaries and bonuses at the investment bank, which also includes sales and trading, by 14 percent to 5.34 billion euros last year from 6.24 billion euros in 2012, the company said. The compensation fell 23 percent in the fourth quarter from a year earlier. “We are keeping an eye on the competition and the pack that we’re competing with for talent,” Jain said. “What we are doing is something the whole industry is doing at varying speeds.” The bank hasn’t lost a “material” number of investment bankers after overhauling its compensation system, which includes staggering annual bonuses over a longer period, he said. [Bloomberg]

Rupert is said (by a newspaper he owns, so maybe they actually know?) to be shelling out a few million for the $Honey. No word on perks. Read more »

Richard Lee, the ex-SAC Capital trader who pleaded guilty to insider trading last week, was fired from a rival hedge fund over a bonus-boosting scheme that was uncovered his first day in a new job, The Post has learned. Lee was ousted from Ken Griffin’s $15 billion Citadel Investment Group in 2008 for fiddling with the trading books in a ploy to pump up his payout, sources said. What’s more, it happened during Lee’s first few hours as head of Citadel’s value special situation team, which focused on mergers, according to sources. Lee never made it to a second day. Citadel accused him of pulling profits from other trading groups to boost his own performance numbers, a source said. The 34-year-old Lee, a graduate of Brown University who lives on Chicago’s tony Gold Coast, had been promoted to head of the trading group after the former chief left in March 2008. Citadel has programs to track such changes and Lee was caught within “three hours,” sources said. In a statement, Citadel hinted at the reason for Lee’s firing, saying he “transferred positions” in such a way that it “would have impacted only his potential future compensation.” [NYP]

Europe has big plans to micromanage bankers’ bonuses and the first step of those plans is to figure out how big those bonuses are. And here is the answer! For 2011, anyway, and for bankers who made more than €1mm. It’s a report from the European Banking Authority based on their data collection project, in which national regulators were asked to collect data on all bankers within their borders who made more than €1mm.

I’ve had a go at putting it into a spreadsheet, which you should play with; you might find more interesting things than I did. But given that fixed vs. variable comp for high earners is the main focus, here’s the fixed/variable breakdown in various countries:
Read more »

Here you can read an independent review of how Barclays lost its way and I submit to you that the fundamental problem was grammar:

In 2005, John Varley launched the Group’s five Guiding Principles – ‘customer focus’, ‘winning together’, ‘best people’, ‘pioneering’ and ‘trusted’ – demonstrating intent to oversee the Group through one set of values. (Section 8.14)

Are your five Guiding Principles nouns or adjectives?1 None can say. Even 30 Rock’s six sigmas were more grammatically consistent. If your five guiding principles are clearly just some mismatched words that someone wrote down and never edited, and that no one could actually use in a sentence, then: they’re not guiding anyone.2

And they didn’t. The lack of a shared understanding of values across Barclays spawned this chart, which might be my favorite thing ever:

Other than that though the report is kind of boring.3 Read more »

Whatever.

If you had John Stumpf in the office “highest-paid U.S. bank CEO for 2012″ pool, congratulations. Read more »