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Recruitment: Compensation calculations

Apples and oranges

One of the key difficulties of moving bankers between banks is that different organizations have completely different ways of paying their staff. “Because [compensation] schemes are so different from bank to bank, the biggest difficulty we have is doing like-for-like calculations on what the value is and how real these schemes actually are,” says a London-based recruiter. This bonus round, the starkest differences were between European and US banks in London. It appears that most US firms carried on paying their top staff exactly as they had before: if a managing director was on a $1 million bonus, $700,000 would be in cash and $300,000 in stock deferred over a couple of years.

In contrast, European banks were much more stringent. Credit Suisse, for instance, had its cash bonuses capped at $50,000, which could be clawed back if the banker left within two years. The remainder of the bonuses were paid in stock and contingent capital bonds.

At UBS, any bonus above $250,000 is paid 60% in stock deferred over three years, while at Deutsche Bank any bonus above €75,000 could have up to 90% of it deferred over three years.