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Morning Coffee: Bank CEO details how to handle your bonus at each stage of your career. Hedge funds in Italy

If you're at the start of your banking career and your bonus is less than you expected, fear not. If you're midway through your banking career and your bonus is less than expected, fear not. But if you are senior in your banking career and your bonus is less than expected, then man (or woman) up - after a long career in finance, you should have other concerns. 

This, in a lot more words and with a lot of advice about empathy around it, is what Richard Handler, CEO of Jefferies, says about receiving a bonus in banking. 

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When you're early in your career, and you get your first bonus, even if it's not "huge" or "what you hoped for" and even though it's depleted by tax, then look on the bright side: you have money in the bank. "For the first time you felt, I’m going to figure this out. I’m going to be ok," says Handler, writing and reminiscing about bonuses past with Jefferies' president Brian Friedman. 

When you're in the middle of your career and your bonus doesn't match your "idealized" number, Handler and Friedman say you can be similarly sanguine. Your number might not "set you up for life" but it can "make a real difference." You can make a down payment on a home, pay off debt, help parents, help siblings and even spend a bit. Then you can feel reinvigorated and motivated to "keep going." 

But by the time you become senior in your career and presumably at the level of Richard and Brian, or maybe even slightly below, money is no longer a concern. At this stage, the two men make no mention of bonus lore, instead they reflect upon responsibility. You're responsible for the revenues and the business model. "You are the one who needs to take all the arrows whether you deserve them or not, so you can protect your people around you," they say. And, "You are the one who must always remain calm on the outside, even if you are a complete wreck on the inside."  

It's not easy at the top of the tree, which explains why senior bankers are so well paid. Handler himself was paid $57m for 2022. This was predicated on him staying with the bank as CEO for five more years.  

Separately, hedge funds have discovered Dubai, but they have also discovered Italy and some have discovered both.

Bloomberg reports that Eisler Capital, which has long been lurking in Milan, is opening a Dubai office, where it will have up to 30 people by Q3 this year. Bloomberg reports that Point72 and Capstone have set up in Milan too. 

Milan has more to offer than style, pizzas and pasta. As we have written here before, Italy also has a friendly tax regime under which you can receive 70% of your income tax-free. 

Meanwhile...

It's not easy being an equity analyst. "You’ve gone from the analyst being at the very highest rank in the industry to being at the lowest rung in the industry, because nobody thinks you need them. A lot of guys do really phenomenal work for many hours, and nobody gives a damn about what they write." (Financial Times) 

If Jane Street is the Amazon of the industry, Flow Traders is looking more like Poundland, with revenues now only 3% of the size of Jane Street, a revenue-per-employee ratio that is only a 10th of Jane Street and a market capitalisation that is a mere €775m. (IFR) 

BNP Paribas cut its 2025 target for return on tangible equity—a key profitability metric for banks—to between 11.5% and 12% from around 12% previously. (WSJ) 

Deutsche Bank's cost income ratio for last year was 75%, much higher than the 62.5% it has promised for 2025. (WSJ)

JPMorgan's China CEO is retiring after 25 years. (Reuters) 

Andreas Koukorinis, the former global head of electronic trading for credit and fixed income exchange-traded funds at JPMorgan Chase, is joining crypto trading firm GSR. (The Block) 

41-year-old Matthew Cooper worked for McKinsey and in private equity before founding fintech EarnUp in 2014. He knew serving as its CEO would likely harm his health. He did it anyway, when he started to feel suicidal he sought help. (WSJ) 

Why Rachel Reeves of the British Labour Party is ok with bankers receiving large bonuses: 'She said that on that £2 million bonus she as chancellor, were that to transpire, would pocket £900,000.' (ITV)

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AUTHORSarah Butcher Global Editor

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