Société Générale has extended its notice period and overhauled its bonus structure for derivatives staff in an attempt to fend off hiring raids from BNP Paribas and Calyon.
Jean-Pierre Mustier, chief executive of Société Générale's corporate and investment banking division, said: "We have a turnover rate that is low by industry standards. But we don't want to be the nice guy that feeds other banks with well-trained professionals."
He said the bank had increased notice periods and deferred compensation to match industry standards. SG declined to comment on details but is understood to have extended notice periods for derivatives traders from three to five months and deferred bonus payments for months in an attempt to prevent defections.
SG's main competition is from French rival Calyon, which is making a push into equity derivatives under Marc Litzler, a former colleague of Mustier. Since joining Calyon in 2004, Litzler has hired SG bankers, including Eric Baudson as global head of the capital markets back office and accounting division, and Fabien Hajjar, as head of equity derivatives.
The other threat is from BNP Paribas, where Eric Le Brusq, a former SG derivatives banker, is deputy head of equities and derivatives sales. BNP Paribas said last week it planned to hire 200 front-office staff to its equity derivatives group this year, double the number recruited in 2005.