Deutsche Bank Investment Bank Bonuses Up 46% After Boom Year


Deutsche Bank AG jacked up its investment banking bonus pool by almost half after a blowout year in the markets, a far cry from the lean years when traders called the annual pay announcement the “day of long faces.”

A 46% jump in variable compensation for investment bankers, and a 29% increase across all units at Germany’s largest lender, compares with smaller gains or even cuts at major European banks that have disclosed the change. The overall pool was trimmed back after the European Central Bank balked at increasing it by more than a third.

Deutsche Bank Investment Bank Bonuses Up 46% After Boom Year

Deutsche Bank posted its first profit last year after five consecutive annual losses, driven by booming income in its trading unit in the wake of the pandemic. The decision comes as the lender is halfway through a deep restructuring plan and forecasts revenue will fall “marginally” as the pandemic effect peters out. Higher volumes and fees in the corporate and private bank will be offset by rate headwinds, while the asset management unit should see “slightly higher” revenues, it said in its annual report published Friday.

The bonus increase “balanced Deutsche Bank’s significantly improved financial performance, delivery against published targets and retention of top talent with the goal of maintaining capital strength,” it said.

The increase of 413 million euros ($492 million) to Deutsche Bank’s overall bonus pool to about 1.9 billion euros compares with an annual profit attributable to shareholders of 113 million euros. Chief Executive Officer Christian Sewing’s pay rose 46% to 7.4 million euros.The lender initially planned to increase the bonus pool to more than 2 billion euros, but had to hold back after objections from the ECB, Bloomberg News has reported.

Reports on the potential size of Deutsche Bank’s bonus pool have angered lower-paid staff, some of whom have been on strike for several weeks asking for a 6% raise.

Meanwhile, cuts at some banks have fomented unhappiness. HSBC Chief Executive Officer Noel Quinn was forced to defend the decrease on calls with investment bankers last week, people familiar with the matter have said. Credit Suisse Group AG cut its bonus pool by about 7% for 2020. UBS Group AG increased its payouts by 24% and Barclays Plc. raised its pool by 6%.

During the lean years, Deutsche Bank’s bonus announcement became known as DOLF, or the “day of long faces,” for the disappointment it caused, people familiar with the matter have said.

Deutsche Bank shares rose 1.4% as of 2:12 p.m. in Frankfurt, bringing the gain this year to 19%.

©2021 Bloomberg L.P.

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