Morning Coffee: Traders storm out over paltry bonuses. 27-year-old JPMorgan analyst caught in deadly door nightmare

efinancialcareers.com:

Bonus day is always a period of high emotions, and sometimes these come out as undignified behaviour.  Bad language, slammed doors and even smashed phones are all pretty common responses to a number that’s much lower than wanted.  But it’s unusual to see anything like the scenes at Aramco’s oil trading operations in Houston, where apparently some traders walked out and went on strike.

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There aren’t many details available – apparently only a handful of people walked out, and since the episode was “brief” they might be a little embarrassed talking about it.  But it seems to have been a terrible failure of expectations management.  The last few years have seen some extraordinary conditions in the oil trading market, with some traders making eight figures. And although everyone in the industry has been paid well, the biggest money has been made at the independent trading houses like Trafigura and Vitol, rather than the investment banks or the trading divisions of oil majors.

The trading desk in Houston which had the little industrial relations problem was originally an independent firm called Motiva Trading, which was taken over by Aramco last year.  Apparently, at the time, employees were told that their compensation “would not change materially under the new ownership”.  This might even have been true; if there’s one thing that traders know, it’s that one year’s revenues don’t tell you anything much about another. But it seems that some people thought that even allowing for market conditions, risk management decisions and the overall cycle, they weren’t getting paid in the same relationship to their revenue production.

This, in turn, must have led to a bit of a learning