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The Sisyphus bonus

Life as an investment banker has always had its drawbacks. Colleagues try to steal your business, senior managers expect obeisance, and clients put your ideas out to tender with competitors.

However, at least the not-so-chivalric code of the banker involved an elaborate ritual that culminated in a tangible reward in the shape of the annual bonus.

After a final late-year frenzy of self-promotion and veiled threats of departure to a rival firm, the banker would collect a bonus that was either in cash or a combination of cash and shares that had a reasonable prospect of rising in value. The annual bonus was at least a done deal, whichever way its components were structured.

However, recent trends in compensation have undermined these verities and made the life of the modern banker even more dispiriting.

Deutsche Bank’s introduction of a system to enable it to claw back bonuses paid to its bankers by their former employers, then bought out at their hiring, was the latest move to chip away at the foundations of the investment banking contract.

Deutsche Bank’s newfound zeal for tackling fundamental compensation issues has surprised former employees and rival dealers. The bank was never shy about paying up for staff from competitors in the go-go years, and it did not appear to have made root-and-branch changes to its hiring policies until recently.

Some sales and trading staff in areas that were de-emphasized after the 2008 crisis, such as structured credit, got the tough-love treatment at bonus time.

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