Drama At Deutsche: Trader Bonuses Spike While Call Center Employee Strike For Better Wages
The controversy over 2020 bonuses across the banking sector is almost over. We’re almost through Q1 2021 and soon the focus will start turning to the upcoming year. But it wouldn’t be the very end of 2020 bonus season without one more piece of delectable drama in the investment banking sector.
And that drama comes out of Deutsche, where apparently the company is “facing criticism” for boosting bonuses to traders. Recall, traders also saw special attention from other banks, like Goldman and JP Morgan, while retail workers and even some C-suite executives saw moratoriums on bonus amounts due to the “optics” of Covid – all despite banks posting yet another record year.
Stephan Szukalski, head of the DBV trade union, told Bloomberg: “It’s bitter to see what kind of bonus pots are possible for investment bankers when there’s supposed to be no money for the company’s low-paid staff.”
The bank expanded its bonus pool last year to over $2.1 billion with a large portion of it going to fixed income trading – a division that had a “standout performance” that was responsible for the bank turning its first annual profit in 6 years. At the same time, Deutsche’s employees at its call center subsidiary, DB Direkt, have been on strike for 5 weeks to protest for a raise in pay. Some employees barely make above minimum wage, according to the report.
“There’s enough money for investment bankers but not for us,” one DB Direkt employee said, calling it “unfair”. DB Direkt employees made an average of 34,100 euros in 2019, which compares to a 230,500 euro average at the investment bank. Last year, investment bankers got “almost a third” of the bonus pool.
Chief Executive Officer Christian Sewing says the bank needs to offer bonuses competitively to keep its key talent. More information on bonuses is expected on Friday, when the bank releases its annual report.
Recall, the last controversy we noted came out of Bank of America where “internal drama” developed over exceptions made for some bonuses. The bonuses in question were shares that were granted to executives who earn $1 million or more. Instead of shares vesting in equal parts over a timeframe, they vested only at the end of four years.
The new rules were supposed to be applied broadly, but it was revealed that many top investment banking and trading veterans spoke out against having to wait 4 years for their bonuses. As a result, management agreed to exempt them. CEO Brian Moynihan said on January 27 that the new policy “didn’t work the way some people wanted it to, so we fixed it.”
Thu, 03/11/2021 – 05:35