Urgent talks on offering equity incentives to fund managers at Dresdner RCM are taking place, following news of merger negotiations between Dresdner and Commerzbank.

Executives at Dresdner RCM, which manages funds totalling €230bn (£144bn), are currently negotiating a phantom option arrangement which could hand them up to 30% of the profits derived from their division. If Dresdner RCM wins the phantoms, it may go on to push for true equity at some point.