Hard cuts at Deutsche Bank: The board decided to “significantly reduce the variable compensation for the year 2016,” said Germany’s largest money house. In addition, other high-level managers should receive much lower bonuses for the past year.
After billions compared German bank bonuses will drastically shorten
Main building of Deutsche Bank (in Frankfurt) with logo (afp / Daniel Roland)
Whether it is 90 percent of the bonuses, as the “mirror” had speculated in advance, Deutsche Bank did not want to confirm. However, a quarter of the 100,000 employees of the Geldhaus must dispense with the individual “variable remuneration” for 2016. According to analysts, the bonuses could thus be EUR 700 to 800 million lower than in the previous year: 2.4 billion euros of bonuses had flowed. A right decision, says Klaus Nieding, vice president of the DSW, the German protection association for securities ownership:
“This is a signal, which is also signaled externally, that such things do not happen unattended, and as a shareholder representative one must say that we have seen years at the Deutsche Bank, where much more bonuses were paid than dividends paid , And as a shareholder, one asks: ‘Is it still possible?’ ”
Board: Hard measures are “inevitable”
The board of directors had probably also observed this, which also explained the deletion of the bonuses by the fact that the burden of the comparison with the US Department of Justice could now be better understood. Thus the fine of a total of 7.2 billion dollars would weigh the result of the fourth quarter with 1.2 billion dollars. Hard measures were “unavoidable”, the board wrote in a letter to the coworkers. The eleven board members, led by John Cryan, also voluntarily refuse their bonus. Last year, they had gone empty, but at the time the Supervisory Board had cut off their bonuses. However, the Bank is not approaching the already paid variable remuneration of former members of the Executive Board: such a clause is not yet legally possible, according to Christoph Schalast, financial expert of the Frankfurt School of Finance and Management:
But what is actually much more efficient is that you can only pay off bonuses after a certain period of time, when you really think you have earned them a long-term salary, and this is a six-year term.
Agreement with US justice in the mortgage dispute
The upper management levels are affected, for the first time, investment banks are also forced to forego their individual bonuses. However, the bank had significantly increased its fixed salaries and thus created a balance. Deutsche Bank is a bit in the grip, says Schalast:
“The non-payment of bonuses, especially in this sector, which is very competitive, can, of course, lead to more and more, especially top employees, switching to other banks that are not subject to these restrictions , And she has also said that to prevent her really important and necessary employees for the future success leave her. ”
The agreement with the US justice in the mortgage dispute had confirmed the bank on the Wednesday night. The concern that billions might not pay the money house without a capital increase does not, however, tell Shastast:
I think that Deutsche Bank has negotiated the same way that it can push the sum to avoid a capital increase and thus a further dilution and a further burden on the share price.
The share price has lost about four-fifths for ten years.