The news that Deutsche Bank in the UK will not be paying bonuses this year may have induced schadenfreude among the less well remunerated. But in the homes of the bankers affected, a meltdown will be occurring. There are always apocryphal tales of ‘the banker who lived on his base salary’ but generally, bankers live on their bonuses, and with the season of the big payout here, wives in particular will have plans in place.
February is the month when most bankers in the UK receive their bonus. As the wife of a banker-turned-consultant, I remember the sense of trepidation before the big day. Negotiations went on for months before. Bankers are either paid up (good) or paid down (bad) on the previous year. No matter how obscene the figure offered, they must act disappointed. ‘One year I was paid $5 million [Dh18.36 million] – which was more than I could have ever imagined – and I had to look like it wasn’t enough,’ says a former trader with Salomon Brothers.
All bankers make guestimates. If a banker earns less than the figure he guestimated, he comes home downtrodden and humiliated (if he comes home at all). If he earns more, he does one of two things. The first lot does nothing. These are the bankers who never tell their (generally foreign or second) wives what they earn or grossly misrepresent the figure. They might say to the Ukrainian former model recruited at George or Annabel’s, ‘Go buy yourself a Chanel handbag, darling’, when in fact she could buy the entire store.
The second lot, married to sensible former professionals, come home and announce, ‘You can go ahead’ – with the new bulthaup kitchen, swimming pool dig-down, country house search and so on. If a banker has been paid up for many years, he says, ‘Darling, you can set up your charity now’. This is a green light to hire the people necessary to do good work on her behalf.
As one banking wife explains: ‘There are seven stages of bonuses. By the third, the wife is a modern art collector. By the fifth, she is a philanthropist. By the seventh, she has an OBE.’ The first stage might have been buying a second car; the second paying off a mortgage. The fourth is turning the country estate into an organic farm or adding a vineyard – faux farming is very popular among bankers.
We’re talking mostly about pre-crash wives. Pre-crash bonuses might have ranged from £100,000 (about Dh532,724) up to £17 million for heads of major American banks. US banks have a reputation for paying more, though every bank has to pay certain people well to keep them. (Bankers move around like football players. They’ll demand a lot to work for a second-tier bank.) Since 2008, bonuses have been capped, reinvested into stock (which often tanks), deferred or put back into the pool to keep juniors from leaving. Where once a bonus could easily have reached multiple millions, now a banker on an average senior pay of £200,000 can expect a much more complex renumeration package. These days big bonuses are mocked by bankers themselves.
‘Many people in the sector still believe they should be paid entrepreneurial wages for turning up to work, with a regular salary, a pension and probably a healthcare scheme and playing with other people’s money,’ said John Cryan, the Deutsche Bank AG co-chief executive officer, at a conference in Frankfurt last November. ‘There doesn’t seem to be anything entrepreneurial about that except the compensation structures.’
Banking is a young man’s game and even the rock-star bankers get sacked. Banks keep some old timers around to do relationship building to keep long-standing clients happy – industry captains don’t really like going to Glyndebourne with some 35-year-old banker married to a model – but, by and large, anyone over 45 still in the game is prey to the hungry underlings who want what he has. Bad years are bad news for banking marriages; we have a friend whose husband pretended to earn far more than he did but, in fact, was in enormous debt.
The huge variation in bonuses, and the absence sometimes of any bonus at all, mean you have to tread carefully. It was just about OK in my day to ask other mothers where they were planning to ski at half-term. Now, there is a sense of shame about the carnage. ‘My banker clients don’t feel entitled,’ says interior designer Honor Riley. ‘They’re not the glossy group. They look after their children. The husbands are more likely to climb Kilimanjaro than go heli-skiing in Verbier. Yes, they have money and send their kids to private schools, but they’re not like the bankers’ wives of 10 years ago.’
What remains the same is the strange dynamic seen only in banking marriages, by which I specifically mean investment banking marriages. There is a gross misunderstanding in the non-financial community about the word banker. All bankers are not the same. Private bankers mostly look after rich families and get home by 6pm. Traders used to be accountable for the big profits and losses, but these days are carefully babysat. The big earners are investment bankers who do deals and fight over them like crazed jackals.
Hedge fund managers are a completely different breed. The successful ones own their own businesses and pay themselves up to 20 per cent of the profits. They can work off their yacht if they so choose. This is the world where billions are earned overnight.
Bankers are merely employees. It is a highly misogynistic industry in which (mostly) men are paid huge amounts to give 100 per cent of their time and energy to a company that could fire them at a moment’s notice. They’re expected to be on call at all times. Cancelling holidays, weekends, births and deaths is all part of the deal.
As they can’t actually spend time with their wives, they trade stuff for affection. Bankers’ wives are glorified PAs. Some do run around with clipboards checking off to-do lists. There is an unwritten assumption that the least she can do (with all that money) is maintain an impeccably clean house with children in only the top schools.
I was never anywhere near as efficient as my peers. They could never understand why I looked as haggard as I did since I didn’t have to work, and what little I did earn wasn’t enough to pay the nanny. A banker told me he once saw a junior rush out of the office to pick up groceries for dinner. ‘He’ll never make it,’ he said. Bankers pay other bankers for the exclusive right to all their time and energy. They expect them to have their wives in check – and organising groceries.
‘The problem is that money is power,’ says Tara Saglio, a couples’ counsellor, whose clients include bankers. ‘If one partner is paid grossly more than the other, it can stop being a partnership and can feel more like an employer/employee situation. Bankers come home stressed after a long day and want to be nurtured. She maybe feels isolated and neglected at home with small children. If the financial rewards are no longer working towards creating a secure family environment but just the trappings of luxury, the marriage can become hollow.’
One banker we know came home one day and told his wife he had bought her a new project – a three-acre plot of land on the other side of the Atlantic. A previous project included a chalet – and she didn’t even ski.
Whether or not they have the spending power they used to, boredom is a problem for all bankers’ wives. A friend in Manhattan says: ‘The big thing for the restless, rich wives in New York is to go back and forth and debate moving to Greenwich or Locust Valley or Florida [for taxes]. And they do the whole thing: interview at schools, apply, drag kids through the process, buy a house there, go on weekends and then stay in the city after pouring $12 million into an apartment.’
Michelle de Biolley, founder of Almost Essential, is one of many in the business of helping such wives. ‘We offer gardeners, chefs, wardrobe organisers, silver repairers, florists, tutors, and the car concierge who looks after your car, takes it to the garage, renews parking permits and negotiates with the mechanic. We offer sending-money-abroad advisers, holiday and house-move organisers, PAs, furniture restorers, and even the picture album put-in-placer.’ All the wife has to do is organise the organisers.
After the crash, so many bankers lost their jobs that today’s wives are more circumspect. We all heard stories of bankers who promised big gifts to charities but never actually made the payments because they were just showing off. Some wives have wised up and demanded to see a payslip. And they have to justify their keep too. Where once they might have paid an interior designer to redecorate a house completely, now they negotiate every transaction – from curtains to Italian sofas – themselves.
Primates of Park Avenue: A Memoir, a book about New York’s wealthiest circles written by an anthropologist, is largely considered rubbish by those in the know. Yet it was right about one thing: the wife’s bonus. I confess that I did once, as a wife, earn a small bonus. After I pleaded outstanding performance as a domestic organiser with great team attitude, my husband did top up my pathetic (separate) bank account. I was never paid up again.