A week after France announced plans to clamp down on traders' bonuses, a specialist Paris trading firm was already working out ways to cope with the new legislation. "I will do everything I can to make sure they don't feel down," Saxo Bank France Chief Executive Pierre-Antoine Dusoulier told Reuters.
Saxo, whose main headquarters are in Denmark, is a specialist trading firm that employs 25 people in Paris with an average age of around 29.
France wants to put a 50 percent tax on bonuses of above 27,500 euros ($39,340), and Dusoulier said it was precisely the sort of relatively junior traders in firms such as his who would be most affected. "If you've just left university, you might have a fixed salary of 30,000 euros and then a bonus of 30,000. Sixty thousand, it's not an outrageous amount," he said. "These are young guys with relatively small bonuses who are going to get it in the neck."
Meanwhile, those with the biggest bonuses would be able to afford the best lawyers to help find a way to reduce their tax hit.
"Those who have big bonuses are often the ones who decide how to pay out the bonuses. They're surrounded by lawyers. The lawyer will find a way out," the 32-year-old CEO said. Although it appeared to be business as usual on Saxo's small Paris trading floor on a recent visit, some employees expressed concern about the future.
"It's a bit discouraging," said Saxo sales trader Gilles Piedoye-Peteuil. For next year, Dusoulier said his Paris team would probably have a smaller bonus but would be compensated by having a higher fixed salary. He said his staff received a "relatively small" bonus in October but declined to specify how much. Despite the general public's attacks on financial traders, whom many blame for being at the heart of the global economic crisis, Dusoulier said morale remained good. "We're motivated by the desire to build something up here," he said.
Dusoulier returned to Paris a few years ago after working in London for Calyon, the investment banking arm of Credit Agricole. Although London has set out a similar 50 percent bankers' bonus tax, many believe Paris could remain at a disadvantage to its British rival as a financial centre.
France's Banking Federation said last week that the bonus tax could disadvantage Paris while the head of France's biggest listed bank, BNP Paribas, also said the tax would be a handicap for Paris "In England, you don't have the same level of tax. In France, it's already at a high level," said Dusoulier.