Now Deutsche is rumoured to be plotting significant reductions in base salaries, soon
Back in July, we were the very first to suggest that Goldman Sachs was thinking of cutting its salaries in London. In August, it came to pass.
Now, we’re hearing similar things about Deutsche.
The German bank is rumoured to be looking at removing the additions to base salary at its corporate and investment bank inLondonwhich were awarded in 2009. According to headhunters, this could leave its senior staff significantly worse off.
“If they removed the additional fixed allowance entirely, an MD would go from around £175k base, plus the £75k fixed allowance, to just the base salary,” points out one.
Deutsche is allegedly in a position to do this because like Goldman Sachs and BarCap it apparently introduced the salary increase as a non-pensionable fixed allowance, which can be removed. RBS is said to have made a similar provision.
However, Deutsche’s efforts to reduce/remove the fixed allowance may not be entirely straightforward. It’s thought that contracts at the bank are not uniform, with the result that it may be easier to reduce salaries for some than others, creating legal problems.
Separately, the bank is said to be preparing for an additional round of redundancies before Christmas. The bank declined to comment, put pointed at a statement it made in October saying it plans a headcount reduction of, “around 500 positions in CB&S during Q4 2011 and Q1 2012, primarily outside Germany."
In the first nine months of 2011, compensation per head at Deutsche’s corporate and investment bank averaged €279k, down 5% on the same period of 2010.