Feb. 8 (Bloomberg) -- Deutsche Bank AG, Germany’s largest lender, told employees it will impose a 200,000 euro ($266,000) cap on bonuses paying out this year, said three people with knowledge of the discussions.
Staff will receive as much as 100,000 euros in cash and 100,000 euros in stock they won’t be able to sell before August, the people said, declining to be identified because the talks are private. Any further bonus will be deferred over three years, they said. The limit will apply to employees across the company, including the investment bank, one of the people said.
Morgan Stanley, Credit Suisse Group AG and Citigroup Inc. have all reduced senior investment bankers’ pay for last year as revenue slows. Morgan Stanley is capping immediate cash bonuses at $125,000, people with knowledge of the move said last month.
“The generic ‘war for talent’ is over,” said John Purcell, founder of London-based recruiter Purcell & Co. “Of course, top performers will always be in demand, but the rising tide that lifted all boats has well and truly gone out. The recent, current and forthcoming redundancies have fundamentally altered the economics of remuneration in banking.”
Christoph Blumenthal, a spokesman for Frankfurt-based Deutsche Bank, declined to comment on the bonus cap. The lender said last week profit fell 76 percent in the fourth quarter as Europe’s sovereign-debt crisis curbed income from trading.
The bank also said it cut pay for employees at the corporate and investment bank by 15 percent in 2011 after income at the division plunged. Deutsche Bank set aside 5.05 billion euros for compensation and benefits, compared with 5.91 billion euros in 2010, according to company filings. That was enough to pay an average of 332,785 euros to the 15,184 employees at the division, which includes transaction banking.
Bank of America Corp. is also freezing base salary levels and limiting cash bonuses to $150,000 for some investment bankers, people with knowledge of the moves said in January. The cap on cash payments applies to those getting as much as $1 million in total year-end bonuses, with the rest coming in shares of the Charlotte, North Carolina-based lender. Employees are being told of their payments today and can sell some of the stock starting on Feb. 15, the people said.
--With assistance from Hugh Son in New York and Nicholas Comfort in Frankfurt. Editors: Edward Evans, Francis Harris.
To contact the reporters on this story: Ambereen Choudhury in London at firstname.lastname@example.org; Aaron Kirchfeld at email@example.com
To contact the editor responsible for this story: Edward Evans at firstname.lastname@example.org