Some would say that Orcel’s pay package is yet another example of same old, same old. So it was exciting to come across an example of the new paradigm in the financial sector. What do I mean by that over-used phrase? In short, a firm that is doing things differently from the discredited big-bank universal model. I have been seeing the name Berenberg Bank a lot recently: often in connection with research calls on European stocks. My curiosity piqued, I was pleased when a friend introduced me to two of the firm’s senior management. In mid-March, I met Andrew McNally, head of Berenberg Bank UK, and Hendrik Riehmer, a managing partner, to learn more about the business.
Berenberg is a small German private bank, headquartered in Hamburg, which can trace its origins back to the 16th century. It is a partnership, and the partners have unlimited liability for the business. Think about that for a minute. If Barclays had been a private partnership, would any senior manager have taken home millions of pounds during a period when the bank incurred billions of pounds in fines for mis-selling products and wrote down billions of pounds on loans and bonds undertaken during the boom years? If UBS were a private partnership, I doubt that Ermotti would earn SFr8.9