27 Aug Supervisory Board dispute over bonuses for investment bankers
In Deutsche Bank, a dispute over the amount of bonus payments in investment banking has flared up. The board should have come to a violent argument, reports the “Wirtschaftswoche”.
DüsseldorfThe amount of the variable remuneration for the investment bankers of Deutsche Bank has apparently divided their management and supervisory board. As reported by several insiders, there was to be a heated debate on the subject at the board meeting on 15 December.
The board responsible for the Investment Bank, Marcus Schenck and Garth Ritchie had campaigned for a much higher remuneration and threatened, otherwise important employees would leave the bank, reports the “Wirtschaftswoche”. However, given poor results in the fourth quarter, other directors and controllers rejected the request. A spokeswoman did not want to comment on the information. Ultimately, both sides should have agreed.
The topic is explosive, because the institute had drastically cut bonuses in 2016. Many bankers did not receive any additional payments at the time. In 2015, the bank had distributed around 1.4 billion euros to investment bankers. Ritchie and Schenck are now expected to have demanded at least 1.2 billion euros.
The largest German money house is still in the process of restructuring. German bank chief John Cryan wants to trim the institute in 2018 on cost efficiency. “As far as our efficiency is concerned, we have done very well in some areas, but overall we have not done enough.” Of every euro that the bank takes, it will retain 15 cents, Cryan said recently. “That’s not enough, as the international comparison shows.”
Despite the weak earning power, the bank did not want to cut back on the bonuses. “We have always said that we want to return to our normal system of variable compensation for 2017,” Cryan said shortly before the turn of the year in an interview with the Börsen-Zeitung. “And we will also raise salaries in some areas.”
After the loss last year, in addition to the Executive Board, the rest of the upper and middle management had to forego performance bonuses for 2016.