Rainer Neske had won over the hearts of shareholders and employees, and now the longstanding head of retail banking at Deutsche Bank is likely to collect even more brownie points by leaving the bank without a financial settlement.
Mr. Neske had thrown in the towel in the dispute over a strategic realignment at Germany’s largest bank. An employee who chooses to leave his position is normally not entitled to a settlement, nor will Mr. Neske receive one.
However, as Handelsblatt has learned from several individuals familiar with the details, the native of Germany’s Westphalia region is entitled to an equalization payment worth €3 million, or $3.3 million, according to his contract.
The amount, which is modest by the standards of bank executives, consists of two components. On the one hand, Mr. Neske’s employment contract contains a no-competition clause, which bars him from working for a competitor for 12 months. As compensation, he will receive an equalization payment of €1.6 million, or $1.8 million.
Mr. Neske is also entitled to a seven-month period of notice, after being with the bank for 25 years, and he will receive compensation of €1.4 million for forfeiting the notice period, people familiar with the matter told Handelsblatt.
“Rainer Neske did not ask for [a settlement] but merely accepted compliance with the terms of his contract, because he wanted to make a clean break.”
However, he will not receive a settlement payment. “Rainer Neske did not ask for one but merely accepted compliance with the terms of his contract, because he wanted to make a clean break,” his attorney, Peter Rölz, told Handelsblatt.
Mr. Rölz declined to say how much the equalization payment would be.
“The overall amount is less than if the bank had continued to pay Neske his salary, according to his contract, until June 2017,” said an individual familiar with the details. Mr. Neske earned an annual salary of €4.3 million ($4.7 million) in 2014.
In addition to his contractual equalization payment, Mr. Neske also enjoys “good leaver” status. This means that, under his contract, he will receive any previously unpaid bonus compensation from past years.
At Deutsche Bank, bonuses for members of the management board are stretched out over five years. Two of the conditions for disbursement in the coming years are that the board member cannot be accused of any misconduct during the bonus years, and that the bank remains solvent.
A spokesman for Deutsche Bank was unwilling to comment on the information, but instead referred to the bank’s announcement on May 20, whereby both sides had agreed to part ways effective June 30.
Mr. Neske told colleagues that he had not followed his attorney’s advice to bargain for a settlement. If he had done so, he said, the negotiations over his termination agreement would have lasted much longer. That would have forced him to stay with the bank for a longer period of time.
“He wasn’t interested in a mud fight,” said a colleague.
Apparently Mr. Neske, who has a reputation as a down-to-earth banker, also wanted to remain true to himself. A discussion, possibly even in public, over excessive settlement payments or demands could have damaged his reputation.
Mr. Neske threw in the towel last month after losing out in the strategy debate. He had advocated a model that would have required a partial withdrawal from U.S. operations, deep cuts in the trading business, the integration of the Postbank subsidiary and focusing on German and European businesses and retail banking customers.
But co-chief executive Anshu Jain and his allies wanted a different strategy that involved the sale of Postbank and more moderate cuts in investment banking.
Mr. Neske’s resignation was about more than just the new strategy. It was merely the last straw. He also gave up the fight in a hopeless culture war. The banker had never come to terms with the short-term trader culture of the investment bankers in Mr. Jain’s camp.
Laura De La Motte is currently an editor at the Handelsblatt finance desk and a specialist banking correspondent. Daniel Schäfer is head of Handelsblatt’s finance pages and based in Frankfurt. To contact the authors: email@example.com and firstname.lastname@example.org