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Morning Coffee: Traders storm out over paltry bonuses. 27-year-old JPMorgan analyst caught in deadly door nightmare

Bonus day is always a period of high emotions, and sometimes these come out as undignified behaviour.  Bad language, slammed doors and even smashed phones are all pretty common responses to a number that’s much lower than wanted.  But it’s unusual to see anything like the scenes at Aramco’s oil trading operations in Houston, where apparently some traders walked out and went on strike.

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There aren’t many details available – apparently only a handful of people walked out, and since the episode was “brief” they might be a little embarrassed talking about it.  But it seems to have been a terrible failure of expectations management.  The last few years have seen some extraordinary conditions in the oil trading market, with some traders making eight figures. And although everyone in the industry has been paid well, the biggest money has been made at the independent trading houses like Trafigura and Vitol, rather than the investment banks or the trading divisions of oil majors.

The trading desk in Houston which had the little industrial relations problem was originally an independent firm called Motiva Trading, which was taken over by Aramco last year.  Apparently, at the time, employees were told that their compensation “would not change materially under the new ownership”.  This might even have been true; if there’s one thing that traders know, it’s that one year’s revenues don’t tell you anything much about another. But it seems that some people thought that even allowing for market conditions, risk management decisions and the overall cycle, they weren’t getting paid in the same relationship to their revenue production.

This, in turn, must have led to a bit of a learning experience.  The lesson being that a verbal agreement in trading isn’t worth the paper it isn’t written on.  Discretionary bonuses are discretionary, and that means that expectations and indications trade at a significant discount to cash.  

Unexpectedly low bonuses are only really a problem if you've foolishly calibrated your lifestyle and expectations to peak years. Russia isn’t going to invade Ukraine every year and there won’t always be conflict in the Middle East (hopefully); a lot of the business of oil trading involves just sitting around watching renewable energy increase its market share.  The phrase made famous in Liar’s Poker was “No Tears”, and it’s still good advice to anyone wanting to preserve their sanity in trading to develop the habit of not complaining too much, win or lose.

In the meantime, if you want to be paid what you think you are worth, there are only two ways to get it.  The first is a written guarantee (which are a lot more difficult to get these days). The second is the ability to make a credible threat.

Unfortunately, therefore, if you want to walk off the floor as a protest, you really need to have somewhere else to walk to, and to be sure that your former employer will miss you. Otherwise, you’re going to end up sloping back in with a silly look on your face and nothing to show for it.

Elsewhere, if for some reason you feel like you’re short of things to have nightmares about, consider this – the big glass doors on skyscrapers in New York can explode for no obvious reason in the wrong weather conditions, inflicting horrible injuries on anyone unlucky enough to be walking through them.

That’s what happened to 27-year-old Meghan Brown in 2015, as she was coming back from a physical therapy appointment.  The brain injuries she sustained left her unable to taste or smell for a while and to forget that she was able to speak Spanish.  They also made it impossible for her to continue her job as an analyst at JPMorgan.

Meghan Brown was awarded $35m in damages against the building owner, as it seems that there had been problems with door-shattering there before, and that a small crack might have been ignored.  But the amount of back and forth argument in the court case suggests that maintenance of these things isn’t straightforward at all.  So there’s potentially nowhere in the financial district where you can be completely safe. Sweet dreams!

Meanwhile …

Sharmin Mossavar-Rahmani of Goldman Sachs Wealth Management does not have much time for interns asking questions about crypto; when one piped up at a summer event in 2022, she just asked “have you thought about at what point you’ll get out?”. The intern might have had the last laugh, though. (WSJ)

Staff at the European Central Bank are up in arms because the catering supplier has downgraded the quality of the olive oil. (Politico)

More departures from the former Marcus team at Goldman Sachs – Swati Bhatia is going to be the head of retail banking and transformation at the US subsidiary of Santander.  It’s interesting to see that although Goldman’s venture into retail banking wasn’t a success, it doesn’t seem to be a negative CV point and mainstream retail bankers regard the Goldman team as having been strong players. (Fintech Futures)

A family of four needs to earn over $80k to be considered “middle class” in New York.... (NY Post)

… but at that level of income, you’re not going to reach the “magic number” of retirement savings, which is now $1.46million (WSJ)

The shortage of accountants in the USA is beyond critical; Tupperware is the latest big company to say that “resource and skill set gaps, strained resources, and a loss of continuity of knowledge” have left them unable to produce their annual report on time.  It seems that the audit profession has tried everything except paying more money. (Business Insider)

They’re good at social media, but they don’t like talking on the phone, they use negative language all the time, and sometimes they don’t show up at all for the first day of work.  Boomers and millennials have a lot of complaints about the youth of today, apparently. (Daily Telegraph)

Congratulations to Steve Cranwell (Europe and Americas), Kariuki Ngari (Kenya and Africa), Rola Abu Manneh (MENA and Pakistan), Zarin Daruwala (India and South Asia) and Patrick Lee (Singapore and ASEAN).  As you might guess from the arrangement of geographical units, they’re the new regional heads of CIB at Standard Chartered. (Bloomberg)

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AUTHORDaniel Davies Insider Comment

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