Deutsche Bank has announced it will not pay any individual bonuses to its top staff for 2016, a year in which the bank faced multiple regulatory penalties.
In a statement issued to all staff yesterday, Deutsche Bank’s senior management said all employees with the titles of vice president, director and managing director would not receive individual variable compensation for the 2016 financial year, though would still be eligible for group bonuses.
Commenting on the reasons for limiting bonuses, the bank said: “Now that we have a clearer idea of the financial impact of the settlement with the US Department of Justice and our performance for the year, we feel that tough measures are unavoidable. This is especially true at a time when thousands of jobs are being cut and our shareholders are not receiving an annual dividend.”
Deutsche Bank is facing a $14 billion fine from the US Department of Justice over its role in mis-selling mortgage securities prior to the financial crisis in 2008.
As a result of the charges it faces in the US, the bank has been dogged by rumours it would require a substantial bailout from the German government.
The statement said 75% of employees will either be barely affected by the announcement or completely unaffected, though it has also made significant headcount reductions in recent years which have affected staff at all levels.
Additionally, some employees occupying “crucial positions” are being granted a special long-term incentive, partially made up of shares, which can be deferred for up to six years.
“We have taken this tough decision because it is the right thing to do. Other companies have taken similar steps in the past and have come back stronger than before. We are convinced that we will too. We plan to return to our normal compensation programs for the year 2017,” the statement concluded.