Morning Coffee: Deutsche Bank staff have to hope this doesn't catch-on. The guys who wear a year’s bonus on their wrists
Christian Sewing is putting some of his money where his mouth is. Deutsche Bank's CEO is investing the first monthly instalment of his commitment to put 15% of his net salary into Deutsche Bank shares until the end of 2022. Intended as a demonstration to investors of his confidence in his own restructuring plan, it’s also a way of sharing the pain experienced by employees who have suffered years of withering deferred bonuses with not much to look forward to other than new rounds of expense reduction.
The Financial Times has run some numbers. It says Sewing spent €44k buying shares in July and August and that he'll be spending another €850k between now and 2022. That's not a negligible amount. Each year it adds up to a small ski chalet and in three years' time it could buy him into the lower end of the Sunseeker yacht range. This is presuming that DB stock holds its value; it has fallen by a third in the past year.
It's one thing having your bonus mandatorily invested in your own company's (depreciating) stock; it's another to put your salary their voluntarily. And the danger is that if the boss does something like this other senior employees will be expected to follow suit.
Basic salaries for material risk takers at Deutsche are high by industry standards. In 2018 there were 27 employees earning over €5m, each of whom could presumably afford to make a similar gesture to their chief executive, to say nothing of various managing directors who might want to make a conspicuous display of fealty to their chief.
Ever since the financial crisis, though, the idea of having a large proportion of your savings in the shares of your employer is pretty unpopular. Everyone in finance understands the concept of diversification and therefore knows that it’s not prudent to double up your risks on a volatile industry. And why would you devote the majority of your waking hours to the job, and make ostentatious shows of loyalty to an institution that won’t love you back?
Hopefully, then, Sewing's self-sacrifice won't go viral. It doesn't need to. Very few people at Deutsche are capable of doing anything that would move the dial for the company as a whole. Christian Sewing’s savings plan makes sense as something for the CEO to do himself; it would be a bad idea to promote it as a general requirement, particularly if the shares were to keep falling.
An equally futile way of spending your bonus, either at Deutsche or elsewhere, might be to buy a really expensive watch to boost your status in meetings. According to numerous people interviewed by the Wall Street Journal, the watch you wear says a lot about you, and what it says is not always “I really wish it was socially acceptable for men to wear jewellery”.
In an age where CEOs check the time on their phones and senior lawyers and bankers wear Apple Watches, however, wearing a precious jewel-encrusted bracelet with clock on invites problems more than admiration. One watch enthusiast told the Wall Street Journal he had to leave his most expensive timepieces behind when going for job interviews for fear of suggesting his compensation package would be out of reach. A software engineer found that his co-workers were googling his watches and looking down on him for collecting them. The only person the WSJ spoke to who seemed truly at ease with the idea of a Rolex as status symbol was the CFO of a luxury goods company…
The car parks of Canary Wharf are apparently full of abandoned top-of-the-range bicycles, as bankers who were laid off took their desk possessions home in boxes and haven’t been able to face making a special trip back to the office to pick them up. Goldman Sachs, Morgan Stanley and Nomura have all confirmed that they are partnering with charities so that the bikes don’t literally rust away to waste. (Financial News)
Bad news for anyone off to Dublin post-Brexit – the junior finance minister has suggested that the caps on top pay are likely to remain in place (Bloomberg)
Are you posh enough to pitch? As well as increasingly admitting that early recruitment through intern programs has not been good for diversity (you only get people who knew they wanted to be bankers when they were 17), HR professionals are increasingly suggesting that “polish”, “fit” and other euphemisms for social class need to be de-emphasised in interviews (Financial News)
It’s an ill wind that blows nobody any good – the slowdown in European growth has meant strong hiring from distressed debt hedge funds who anticipate increased defaults (Bloomberg)
Prop trading firm OSTC is hooking its traders up to heart rate monitors in order to measure and improve their performance, with the help of a sports scientist. (Financial News)
According to a relationship counsellor, couples who work long hours can keep their relationship strong by texting each other the occasional heart emoji. Although when you consider how relationship counsellors make money, this advice might not be slightly compromised (Guardian)
And compliance starts from the top – Swedish pension fund AP1 has fired its CEO for breaches of “internal trading rules” (Bloomberg)
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