Morning Coffee: These banks pay the biggest cash bonuses. Barclays has staved off an exodus of U.S. bankers
As we reach the ragged end of summer and banks start thinking about the third quarter, appraisals, and bonuses, the European Union's bonus cap is also demanding urgent attention. If banks want to increase salaries to mitigate the effects of the bonus cap, they will need to do so before January 2014. UBS has increased salaries already and yesterday HSBC said it was thinking of doing the same. A survey by Mercer found that 80% of banks are thinking of increasing salaries to reduce the effects of the cap, so expect a lot of hikes in banks' salaries in the months to come.
European banks could certainly do with increasing salaries, or with deferring less of their bonuses. Research by New York Times' DealBook shows that European banks defer a lot more of their bonuses than U.S. firms - even in London. DealBook found that Barclays deferred 70% of regulated employees' compensation across the whole firm in 2011, while Citi deferred 60%. By comparison, figures for the same year (which were the most recently available), showed that only 40% of compensation was deferred at Citigroup's global markets operation in London, that Morgan Stanley deferred 43% of pay in London, that JPMorgan deferred 44% and Bank of America deferred 49% of pay in the City.
Barclays' high rate of bonus deferrals is one issue said to have caused disgruntlement among investment bankers in its U.S. operation. Bloomberg reports that several of Barclays' most senior U.S. energy bankers tried to quit. Gregory Pipkin and other senior members of Barclays' U.S. energy team reportedly received offers from other banks like Wells Fargo and Bank of America and were ready to leave Barclays until Skip McGee, the hyper-competitive head of Barclays' U.S. investment bank, persuaded them against it. It's not known whether McGee offered Pipkin et al a big financial incentive to stay (AKA a buyback), but it seems unlikely that charm alone would have turned their decisions.
Evercore wants to hire up to 10 investment bankers in Singapore. (Bloomberg)
Sascha Prinz, who was most recently head of US swaps trading for Europe, the Middle East and Africa at Bank of America Merrill Lynch, has resigned. (Financial News)
Goldman Sachs won’t be hiring another 50 people in Brazil after all and 25% of its existing 45-person Brazilian team has actually left the bank. (Bloomberg)
All of these banks will work on Barclays’ rights issue: ABN Amro, Banco Santander, BNP Paribas, ING, JP Morgan,Mediobanca, Morgan Stanley, RBC Capital Markets, SMBC Nikko Capital Markets Credit Suisse, Deutsche Bank, Bank of America Merrill Lynch and Citigroup. (Financial News)
The most outrageously sexist email ever regarding ‘hedge fund’ recruitment. (Jezebel)
Do you still need a CV in the age of LinkedIn? (HBR)