At the end of the first quarter of 2019 there were 38,305 people working in Deutsche Bank's corporate and investment bank (CIB) globally, of whom around 17,000 were in the front office. By all accounts, Deutsche is now looking at cutting around half of them in the 12 months. However, CEO Christian Sewing could take a different approach: he could simply chop Deutsche's highest earners.
In 2018, Deutsche Bank employed 643 people who earned over €1m ($1.13), distributed as per the chart below from its compensation report.
Deutsche Bank doesn't disclose how much it spent compensating these 643 people, but if the mid-point between each salary range is taken as an average, the implication is that the wage bill for these top staff was €1.2bn last year, or 30% of the nearly €4bn wage bill for the corporate and investment bank globally.
Deutsche's CIB employed 38,000 people in total last year, so put another way 2% of Deutsche Bank's staff accounted for 30% of the pay.
Clearly some of these staff are the sorts of revenue-generators Deutsche would sorely miss. However, insiders at the bank have also long-complained of an overpaid tier of bureaucrats whose disappearance would barely be noticed. Figures from 2017, showing that Deutsche Bank's UK investment banking operations had twice as many managing director and directors as analysts and associates, seemed to confirm this.
Instead of cutting whole businesses, Christian Sewing could therefore have another way foward: he could simply trim some of the high earners who don't seem to have been high performers and cut costs that way. In doing so, he would also invigorate a new generation of more junior bankers who would have their paths to promotion cleared and who might (possibly) do better than their predecessors.
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