We need a new investment bank that sells itself on low pay

By far the most cheering thing in the Financial Times newspaper last week was a letter from Robert Pickering, the man who used to run Cazenove. In it, he took a potshot at Antony Jenkins, the Barclays boss, for trotting out the dreary old cliché of the death spiral to justify his bankers' bonuses.

There is absolutely no need, Mr Pickering pointed out, to pay ever bigger sums to prevent investment bankers from quitting – no bank ever went under because its people got poached. Bankers come and go and the world goes on turning.

The letter was delightful because a) it was right; b) it came from someone who knows what he’s talking about; and c) it is always terrific spectator sport when bankers start attacking each other.

Mr Pickering says there is no point in spraying money at people who are threatening to leave, because you can survive without them. That is true; but from where I sit, outside the warped world of investment banking, there is another truth. There is no point in spraying money at people because, to quote Jessie J, it’s not about the money.

When it comes to poaching, there are two sorts of employees – footballers and journalists. If you are a footballer, it is about the money. You have a set of skills that are measurable, and if someone else values them more than your current employer you move on. Modern investment bankers have become like footballers. They sell themselves to the highest bidder.

Worm's eye view
At the other extreme are journalists. I single us out not so much because we are special as because I happen to have a worm's eye view of the comings and goings at the Financial Times – it seems like every week for 28 years, I've witnessed a leaving party or two, so I know what I'm talking about. Yet I can think of hardly any colleagues in that time who have left because another paper looked at their skills (which are almost as easy to measure as those of a footballer) and was prepared to pay more for them.

Quitting to get richer
That is not to say that people haven't quit to get richer – quite a few have left journalism because they fancied the swankier lifestyle in public relations. But only very rarely do they get lured away to a similar job for more money.

Sure, most leave having negotiated a slightly better salary, and some craftily use an approach to wrest a rise. But the real reason is always something else. Either the other paper is offering a column or a grander position, or the journalist felt unloved, had risen as far they could go – or had fallen out with someone.

Most relatively decent organisations are much closer to the media model than to the football one. A survey by Gallup in the US showed that workers chose to leave jobs because they didn’t like their boss, they felt they didn’t fit in, or there were no promotion prospects. Only about 20 per cent said money had anything to do with it.

So why is it like this? Why do people stay when more money could be found elsewhere? In the case of the Financial Times, it is due to four things.

First, it is a newspaper of which, most of the time, you can feel proud. Second, it moves its journalists around so they don’t get bored. Third, colleagues are pretty congenial and, finally, there is a benign owner who doesn’t tell you what to write.

Grasping soullessness
When I joined the City in the early 1980s, investment banking had not yet adopted the football model. If you were a Warburg man you didn't become a Schroders man just because it was prepared to pay a bit more. That sedate old world has gone, but the grasping soullessness of the new one surely creates a gap in the market for something a little nicer.

There is a need for a new investment bank, built along newspaper lines. It would pay relatively badly (though still handsomely compared with non-banking jobs) and would make this into a big selling point.

In return, it would promise to treat young bankers as people, let them go home at a reasonable hour and allow them to feel (a bit) proud of what they did.

There would be a moral superiority to be had from working there. It would be the Waitrose of investment banking. Aspiring bankers, not yet corrupted by the current model, would surely flock to it. So would clients, hungry for something a bit less flash and brash than what is now on offer.

The trouble with my new bank is that you would need a largish group of seasoned bankers to set it up, all of whom would need to take a big pay cut. Mr Pickering, writing from his armchair, is gloomy at the prospect of anyone changing much. And I have a nasty feeling he could be right on that too. – (Copyright The Financial Times Limited 2014)