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BOB MOON: Remember Lehman Brothers? It’s a name plenty of investors would rather forget. But ever since its failure rocked the financial markets, hundreds of Lehman traders have actually kept on working. They’re still unwinding the $10 billion in assets that were held by the firm. And today comes word that a bankruptcy judge has approved an extra $50 million in bonuses. The payout is supposedly aimed at hanging on to the hired help.
They’re not the only ones making big money again in the wake of the financial crisis. But there’s a growing backlash, both here and abroad. The U.K. and France are imposing steep one-time taxes on big bonuses. Marketplace’s Amy Scott checked out the mood in Germany’s financial capital.
AMY SCOTT: In the cafeteria at the Frankfurt School of Finance and Management, future bankers drink coffee as they do their homework. People in this industry have been slammed in the past couple of years for making handsome salaries, even as they lost billions of dollars on risky investments.
Student Christian Marx works part-time at Deutsche Bank. He still wants a career in banking. But, he says, a lot of his friends from school have had second thoughts.
CHRISTIAN MARX: After graduation they changed or moved to companies in for example the electricity business, oil industry, and did something else.
For one thing, they may not be able to make as much money in banking in the future. Public outrage has prompted lawmakers to limit executive pay. Faced with the threat of more serious restrictions, Germany’s largest banks and insurers have volunteered to make their own changes.
Hartmut Kliemt teaches business ethics at the Frankfurt School. He says Germans are even more offended by excessive salaries than Americans are.
HARTMUT KLIEMT: Well, that’s presumably the German tradition of communitarianism in a way. Feeling like a group rather than an assembly of individuals. It’s us. Not me and you and Mr. X.
But as financial firms return to big profits, Tim Zühlke predicts the coming bonus season will be better than last year. He recruits bankers and traders at Indigo Headhunters.
Zühlke guesses bonuses will be up 30-40 percent on average, partly because many people got no bonuses last year. But, he says, unlike their counterparts in New York and London, Frankfurt financial types don’t flaunt their wealth.
TIM Zühlke: That’s exactly the German way. You buy the car, keep it in the garage, and you drive it on a summer day somewhere on the outskirts, but you definitely don’t go to town with the Ferrari.
Still, there was money in the air on a recent evening in Frankfurt’s financial district. Outside the Bull and Bear, a bar around the corner from the stock exchange, I found a group of young expats drinking beer under heat lamps.
CHRISTOPHER BRENNAN: It’s standard Friday night, cause we work across the road. So we come over after work, have a few beers. It’s a bit more upper class, isn’t it? Not that we’re posh, but…
Twenty-two-year-old Christopher Brennan came over from Ireland a few months ago to work as a financial adviser — basically a salesman — at an offshore investment firm. He hasn’t noticed any resentment towards his type.
BRENNAN: The entire city is built on economics. It’s all built on money, it’s all built on finance. So if you’re part of that, you’re part of the city. You’re part of the reason the city ticks, is how people look at you.
With the markets up lately, Brennan and his friend James Kennerdale are feeling pretty optimistic about their own paychecks.
BRENNAN: There’s quite a lot in the burner, which should make for a white Christmas.
JAKE KENNERDALE: Even with the financial crisis, at 22, it’s more money you can make than you ever thought you could have. Coming from a single-parent family to coming out here to earning this kind of money. It’s exciting. I think we’ll do all right, won’t we? Yeah.
In a good week, Kennerdale says he can take home as much $3,000. But he knows that’s nothing compared to what guys like him were making a few years ago.
In Frankfurt, I’m Amy Scott for Marketplace.