Deutsche Bank Execs Fired For Expensing Strip Club Trip Lost Millions In Deferred Compensation
The senior Deutsche Bank executives who were unceremoniously fired earlier this year after management learned that they had tried to expense a roughly $1,000 receipt from a trip to a NYC strip club will lose out on a combined $6 million in deferred compensation, according to the New York Post.
According to the Post, the bankers partied at Sapphire New York, a strip club on the Upper East Side that also operates a steakhouse (which offers a $25 "body sushi" menu item where patrons can eat raw fish off a stripper's torso). While the three senior bankers who were ultimately canned over the episode insisted that the check was from the steakhouse, not the strip club, one unnamed junior banker who had been along for the ride ultimately confessed to management - and was spared the axe for his honesty.
Sources inside the bank told the Post that the bank's decision to keep the junior employee who spilled the beans was intended to emphasize the fact that it wasn't the crime, but the cover up.
"It really was about the coverup and the deception," the source said. "The coverup was worse than the crime."
One DB spokesman said in a statement that "Deutsche Bank thoroughly investigates allegations of possible misconduct comprehensively and without bias. We do not condone violations of our Code of Conduct or Company Policy and take remedial action as appropriate based on the severity of circumstances. The Bank declines to comment further on the circumstances of this particular matter."
As for the millions of dollars in compensation that the employees lost, at DB (and indeed at most investment banks), bonuses for top employees (typically a mix of stock and cash) are typically deferred for several years while they vest. The point of this practice is to tie top employees to the long-term performance of the firm by withholding at least some of their annual bonus compensation. When a worker is fired for cause, he loses all the deferred compensation he has accrued.
For two of the fired bankers (head of equity capital markets Ben Darsney and the managing director Ravi Raghunathan, responsible for running the bank's SPAC business) These figures were substantial.
But there's one silver lining: the loss of their bonuses means the men might have an easier time finding a new job on the Street, since their comparative compensation figures will be lower. The word on the street is that they will all find a new home by the summer.
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