Bonuses cut after Peter Young fiasco

Bonuses at Deutsche Morgan Grenfell are believed to have been cut by as much as 20 per cent, a result of the pounds 400m Peter Young fiasco last year and a sharp increase in staff numbers, writes Clifford German.

Although 1996 was a good year for most of the seven profit centres in the bank the bonus pool was reduced to take account of the activities of Mr Young.

The number of eligible individuals for bonuses also rose to more than 8,000 world-wide. Staffing numbers in London increased by several hundred to more than 3,000, reflecting the bank's expansion programme.

Biggest cuts in bonuses were in Morgan Grenfell Asset Management, the division which carried the can for Mr Young's losses.

The discretionary bonus system, though, did mean that some individuals received bigger cheques than in 1995. All staff are eligible, from secretaries who may get bonuses into four figures to senior managers whose entitlements will be measured in five and six figures.

One notable omission from the bonus payout list was Nicola Horlick, former head of Morgan Grenfell Asset Management's institutional arm, who forfeited her entitlement by resigning recently after a well-publicised bust-up with the management.