- Deutsche Bank awarded staff 2.4 billion euros ($2.6 billion) of bonuses for 2015, 1.45 billion euros of which was for the combined investment banking and trading unit, according to the bank’s annual report. Of the 2.4 billion euros, 49 percent was deferred stock and cash while the remainder was paid out immediately.
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The bank risks angering staff if it abandons cash incentives entirely, said Alan Johnson, founder of New York-based compensation consultancy Johnson Associates Inc. If the board proceeds, it should at least pay cash bonuses to junior staff and structure something creatively for senior bankers that could dramatically increase in value if the bank recovers.
Here we have a situation where their employees expect cash bonuses, and it is argued that they could abandon ship without them; however to give the bonuses jeopardizes the sustainability of the bank. Yet, if the bank gives the bonuses, the losses could eventually be socialized in a bailout, which looks like the socialization of bonuses.
Not a good situation at all.
Aren't bonuses supposed to be for performance? And not just individual performance but group performance? A bonus id basically a dividend, and there is no dividend if the company is bleeding money. This is ridiculous. Why are bonuses just expected in finance and nowhere else? I can't stand the argument that you lose good people when you don't pay the best. If you had the best people, your company wouldn't suck balls in the first place. Finance needs a big reckoning, one they apparently didn't have in 08-09 when it looked like the case. I don't want to live through that pain again, but somehow banking needs to return to being a relatively boring but stable industry that provides a good upper middle class income.