Finance Bulletin

Deutsche Bank’s Global Executive Committee, comprising ten top officials, including Anshu Jain, Head of Global Marketing, and Michael Cohrs, Chief of Global Banking, will follow Joseph Ackermann, the bank’s Chief Executive, and other senior managers in giving up the bonus they have earned this year, running into millions of Euros.

The move comes in the wake of the global financial crisis which has left the German financial sector alone in need of an estimated €500bn ($670bn) bail-out. The country’s parliament is currently working on a plan in this regard

‘Excesses’ in banking industry criticized

The bank’s decision should be seen against the backdrop of severe criticism of the ‘excesses’ in the banking industry that have led up to the present financial crisis, and as an acknowledgement of the possible public reaction if the honchos were to receive their hefty bonuses. German executives have been particular targets of public annoyance at the fat pay cheques top names in the finance industry take home while the financial world is in crisis

Mr Jain and Mr Cohrs, both operating out of London, are among the six non-Board level members of the Committee who last year together earned €97m in pay and bonuses.

The bank has a four-member Management Board, which includes Mr. Ackermann, and a 20-member Supervisory Board, and all members of both have given up their rights to the bonus this year.

 “Give it to those who need it more than I do”

Speaking to Bild, Germany’s most widely-read newspaper, Mr Ackermann said the bonus payment he was foregoing, amounting to millions of Euros, should be shared by “deserving employees who need the money more than I do”.

Mr Ackermann took home a total of €14m last year, of which €12.7m was performance linked or part of long-standing incentives. Other Management Board members were together given €16.2m in performance-related pay, while Supervisory Board members got €3.7m.

‘No Bonus’ move puts other bankers under pressure?

The renunciation of bonuses by Detuche’s big names could compel other bankers to make similar gestures. German Minister for Economy Michael Glos has already stated that other banks should follow Deutsche Bank’s example.

It must be noted that Deutsche Bank has not been affected as much by the financial crisis as other banks, and though it has been forced to write off several billions of Euros, it has not looked for additional capital, other than a marginal share in Postbank, a regional competitor.