Deutsche Bank to Pay Bonuses to Deserving Staff, Sewing Says
Deutsche Bank to Pay Bonuses If Staff Deserve Them, Sewing Says
(Bloomberg) -- Deutsche Bank AG is set to post its fourth annual loss in five years, but that doesn’t mean nobody will get a bonus.
“We are aware that this is a sensitive topic, but obviously we will compensate our people according to their operating performance,” Chief Executive Officer Christian Sewing said on a conference call. “Deutsche Bank will remain a global bank, an international bank, and that means that if the performance is there, we pay in a competitive way.”
Deutsche Bank has sought to strike a balance between cutting costs and rewarding its best employees to keep them from joining competitors. Sewing’s comments came after he suspended the lender’s dividend for two years to help pay for a 7.4 billion-euro ($8.3 billion) overhaul that will see it renounce the ambition of competing toe-to-toe with Wall Street firms.
The lender will “clearly” face a net loss this year because of the charges, Chief Financial Officer James von Moltke said on a conference call with reporters on Monday in London.
Overhaul costs and writedowns are “certainly not something that we can hold against our people,” Sewing said on the same call. “We will absolutely observe the operating performance going forward and decide on that performance.”
In promising future rewards, Sewing is recognizing that Deutsche Bank will have to lean on a shrinking number of rainmakers to carry it through an overhaul that includes 18,000 job cuts and deep reductions to its investment bank. The lender will lose revenue as it pulls out of equity trading and has said the exit could have knock-on effects on other businesses.
“This will be a bank everyone can be proud of,” Sewing said of the company’s goals. “This energizes me, this energizes our new leadership team. This will energize all of our employees and clients.”
Deutsche Bank reported net income of 267 million euros ($299 million) in 2018 after posting almost 9 billion euros of net losses in the preceding three years combined. The bank cut its bonus pool for last year by 14% and prioritized rewards for top performers. It also took radical step of slicing variable compensation for 2016 by almost 80% after racking up costs to settle past misconduct by staff.
For his part, Sewing said he will tie his personal wealth closer to the bank’s fortunes by investing a “substantial amount of my fixed salary” over the next years. While he didn’t get more specific, a person familiar with the matter said Sewing plans to start investing 25% of his salary in Deutsche Bank shares. Reuters reported the figure earlier.
To contact the reporter on this story: Nicholas Comfort in Frankfurt at ncomfort1@bloomberg.net
To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Ross Larsen
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