Handelsblatt Exclusive

Deutsche Bank to propose new bonus system for execs

Deutsche Bank CEO Cryan addresses the bank’s annual general meeting in Frankfurt
Picture Source: Reuters

Germany’s largest financial institution, Deutsche Bank, has drafted a new system for executive bonuses, financial industry sources told Handelsblatt, after a shareholders rejected a previous plan over criticism that it was too complex and lacked transparency about compensation.

Under a system proposed last year, executives in charge of operational units such as investment and retail banking would have received extra bonuses based on performance, in addition to their standard short-term and long-term bonus plans.

Shareholders rejected this plan due to concern that the performance goals were vaguely defined, potentially giving executives leeway to determine their bonus size. Jeff Urwin, the corporate banking chief, could have received an additional €3.3 million for up to €13.2 million in bonus pay in his best case scenario.

The new system does away with the extra form of compensation and returns to the system of short-term and long-term bonuses, sources said, with long-term bonuses carrying a greater weight. The revised two-part system will also be tweaked to place a greater weight on performance of operational executives.

Deutsche Bank’s executives will also set themselves a voluntary bonus cap of €9.85 million, and the financial institution would have the power to demand that executives return their bonuses if they have done damage to the bank. In 2016, executives waived their bonuses due to the bank’s financial difficulties.

Deutsche Bank’s supervisory board sill has to sign off on the plan and present it to the bank’s annual meeting in May. The bank declined to comment.

Read the full story in Wednesday’s Handelsblatt Global

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