The news that Garth Ritchie, head of investment banking at Deutsche Bank, is being paid €250,000 a month for extra responsibility 'in connection with the implications of Brexit' has been condemned in Germany, where politicians and union leaders are preparing to oppose a potential merger with Commerzbank and associated job cuts.
If Ritchie is being paid €250,000 a month for the work, he must have valuable insight into how Brexit will play out and he clearly knows much more than the locals, who are showing distinct signs of confusion at the moment.
Ritchie is originally from South Africa but has spent many years in London, so perhaps it is his perspective as an outsider who knows his adopted country well that helps him to see further than others.
He already knows how long the effects of the Brexit crisis will reverberate, for example. Deutsche’s annual report, which was released in late March, noted that Ritchie has been awarded his monthly functional allowance for matters relating to Brexit for the period between December 2017 and November 2020.
By November 2020, Ritchie will have been paid €9 million for shouldering this burden. Some might argue that this is a lot of extra pay, but many of us will be relieved to learn that the implications of Brexit will have played out by the end of next year.
For that we can give thanks and agree that the money has been well spent.
Ritchie has other responsibilities beyond considering the implications of Brexit, of course. He is a busy man! Although perhaps not as busy as some of his peers, as Deutsche’s annual report lists his objectives more succinctly than those of other members of the management board.
Ritchie’s goals for 2018 included the refocusing of Deutsche’s corporate and investment bank. Financial industry insiders know that this is an important task, so it is probably for the best that the objective did not have detailed benchmarks for success attached.
“Communication with clients and internal culture were to be improved,” the report said. Here Ritchie can be given a qualified pass mark. Deutsche has been losing market share, including in areas such as serving hedge funds via prime brokerage. Having fewer clients has therefore almost certainly allowed Ritchie to improve the quality of communication with the remaining customers.
Ritchie’s third objective was “to create closer ties with regulators in Great Britain”.
He can presumably be judged a resounding success in achieving this goal. He is based in London, so it cannot have been too challenging to drop in on the Bank of England or the Financial Conduct Authority.
The Bank of England is a five-minute walk from Deutsche’s offices on Great Winchester Street or 30 minutes in a chauffeured car, for example.
Or perhaps Ritchie hosted regulators in the Anshu Jain memorial suite at Deutsche’s trading HQ.
The closer ties with UK regulators no doubt involved a valuable two-way exchange of information. Ritchie’s insight into the implications of Brexit must have bucked the spirits of the public servants, who have been viewing the process through a distinctly gloomy lens.
And Ritchie probably gained some intelligence about whether or not regulators believe that Deutsche can be trusted to move beyond its reputational challenges and become a responsible corporate citizen.
If he continues to meet his objectives so efficiently, there will surely come a day when a grateful bank places a reworking of Rodin’s sculpture ‘The Thinker’ in Ritchie’s image among the art works in its lobby as a tribute to his service.