Voting rights advisers criticize Commerzbank’s remuneration system

Frankfurt The Commerzbank is holding a virtual general meeting for the first time this year because of the corona crisis. But even without protests from small shareholders on site, there will be no shortage of critical topics at the event on May 13.

Added to this is the criticism of Commerzbank’s remuneration system. The influential voting rights advisor Glass Lewis and his German subsidiary Ivox recommend that shareholders reject the slightly modified remuneration system for members of the Management Board in March 2020. This emerges from the recommendations of both companies for the Annual General Meeting, which are available to the Handelsblatt.

“From our point of view, there is great potential for improvement in the company’s remuneration policy,” says the Glass Lewis study. The goals on which the variable remuneration of the Board of Directors depends are too vague and too focused on the bank’s performance in the past.

Anglo-Saxon investors in particular often follow the advice of proxy advisors such as Glass Lewis and ISS at general meetings. If the Commerzbank shareholders did not endorse the remuneration system, the Supervisory Board would have to deal with it again. Germany’s second largest private bank did not want to comment on this.

Criticism of the number of positions

In his study, Ivox also speaks out against the planned election of Jutta Dönges to the Commerzbank Supervisory Board. The co-boss of the finance agency is to be elected as the new representative of the federal government to the control committee in May – together with Frank Czichowski from the KfW development bank.

Dönges and Czichowski are to replace State Secretary Markus Kerber and Anja Mikus, who heads the State Fund for Nuclear Waste Management. After Commerzbank’s rescue from the crisis, the federal government still has a good 15 percent stake in the bank – and anything but satisfied with the development of the money house in recent years. In Berlin, some have hopes that Dönges and Czichowski can give new impetus to the supervisory board.

But at least Ivox has reservations about the Dönges personnel. There are no doubts about the manager’s qualifications, according to the study based on guidelines of the BVI fund association. “However, there are concerns about the number of mandates.”

Dönges is already a member of the supervisory bodies of the FMS Wertmanagement and the Deutsche Pfandbriefbank. In addition, there is her job as managing director of the finance agency, which Ivox rates as an “executive position” like two mandates.

According to this method of counting, your work on the Commerzbank Supervisory Board would be your fifth mandate. And that would be two more mandates than Ivox recommends for people in an “executive position”. “Therefore, this election should be viewed very critically,” said the voting rights advisor.

The finance agency did not want to comment on Ivox’s criticism. However, a spokeswoman pointed out that Dönges had resigned from the supervisory board of Eurex Clearing in order to avoid conflicts of interest.

In contrast to Ivox, the parent company Glass Lewis has no objection to the choice of Dönges. Other persons familiar with the personnel also consider the appointment to be sensible, after all the financial agency manages the federal government’s participation in Commerzbank and is in close contact with the institute anyway.

Dönges is also highly valued in Berlin because it closely monitored the Commerzbank strategy review. Some also believe that Dönges’ work at FMS Wertmanagement cannot be viewed as a full supervisory mandate.

More concrete goals for 2020

The core remuneration system for Commerzbank board members has existed for several years. In March it was slightly adjusted to take account of the new requirements of the second Shareholder Rights Directive (ARUG II) and the new version of the German Corporate Governance Code. The most important innovation is that a maximum remuneration for each member of the Board of Management of six million euros per fiscal year has now been fixed.

The variable remuneration of the Management Board depends 70 percent on the achievement of the Group’s goals and 30 percent on the development of the department for which the respective Management Board member is responsible. In addition, individual goals have an impact on the amount of bonus payments.

When calculating the variable remuneration for 2019, the development of the bank and the respective department in 2017, 2018 and 2019 is taken into account. Glass Lewis criticizes this approach as backward and advocates “forward-looking” goals. However, this would have the consequence that Commerzbank could not set the bonus payments for 2019 until 2021 – and that the actual payment to the Management Board would then be postponed even further.

Voting rights advisers also take a critical view of the fact that the expectations of the Management Board are not described clearly enough. The performance goals are “only presented in a descriptive manner, but not clearly disclosed,” complains Ivox. As a result, it is not understandable for shareholders whether the goals for the Management Board are ambitious enough, emphasizes Glass Lewis.

Strictly speaking, these comments do not refer to the remuneration system, but to the remuneration report, which the Annual General Meeting does not vote on this year. Nevertheless, there are employees within Commerzbank who find this criticism justified. According to financial circles, the goals for the Executive Board in the 2020 financial year have therefore already been formulated more specifically.

It is of course another matter whether there will be any significant bonus payments in view of the Corona crisis 2020. In addition, the payment of Commerzbank management is generally rather below average compared to other institutions. In the past year, the total remuneration of the Management Board amounted to EUR 12.1 million. At the neighbourhouse Deutsche Bank the executive committee received almost three times as much despite a loss of billions.

Assistance: Jakob Blume

More: Bank President Zielke: “Must review Corona business model”


Million dollar bonuses for Goldman bankers drive shareholder advisors onto the barricades

Boston, New York The influential voting rights advisor ISS stands against the millions of bonuses for Goldman Sachs boss David Solomon and other top managers of the bank. Goldman Sachs ISS increased the bonus for CEO Solomon sharply, although some important key figures would have deteriorated in 2019 compared to the previous year, ISS criticized in a Reuters report on the night of Friday.

Solomon earned nearly $ 25 million in 2019. ISS recommended that shareholders vote against the salary package at the Annual General Meeting next Thursday. The shareholders’ vote is only of an advisory nature and is therefore not binding. Many funds and large investors follow the recommendations of voting rights advisers such as ISS and Glass Lewis.

Solomon succeeded Lloyd Blankfein at the top of Goldman Sachs in October 2018 and was able to look forward to a substantial salary increase in 2019. He collected a total of $ 24.7 million, of which 7.65 million were bonus payments. Solomon thus received 19 percent more money than in the previous year, although the investment bank’s profit plummeted 19 percent to $ 8.47 billion.

However, the highest-paid US banker remained long-time JP Morgan boss Jamie Dimon in 2019, who received $ 31.5 million after a record profit from the bank – 1.6 percent more than in the previous year.

A Goldman Sachs spokesman defended the salaries for top managers around Solomon. Goldman rewards long-term growth and does not place undue emphasis on short-term results. Income for 2019 reflected the significant long-term success of the top management.

More: How the corona crisis will weigh on US banks’ businesses.


How much dividend does Merck pay?

Will the 2020 Merck Annual General Meeting take place despite the corona virus?

No. The Merck Annual General Meeting is being postponed due to the current corona crisis. A new date has not yet been set.

When did the 2020 Merck Annual General Meeting actually take place?

On April 24, 2020, the Merck Annual General Meeting would have taken place in the Jahrhunderthalle Frankfurt, Pfaffenwiese 301, 65929 Frankfurt am Main.

how high is the Merck-Dividend 2020?

Merck KGaA shareholders proposed a dividend of EUR 1.30 per share for the 2019 financial year.

How high was the 2019 Merck dividend?

The 2019 dividend for the 2018 financial year was EUR 1.25.

When will Merck pay the 2020 dividend?

The dividend is due on the third banking day after the Annual General Meeting.

When does Merck Post share “ex dividend”?

On the first business day after the Annual General Meeting, the share is listed “ex dividend” – the price of the share is reduced by the value of the dividend.

When do I have to buy Merck shares in 2020 to receive dividends?

In order to receive the Merck dividend for the 2019 financial year, the shares must have been purchased at the latest on the day of the Annual General Meeting.

Author: Merck


Deutsche Bank shareholder demands dismissal of AR boss Achleitner

Paul Achleitner

A critical shareholder has been calling for the chairman of the supervisory board to be dismissed for years.

(Photo: dpa)

Frankfurt Every year: the general meeting of the German bank on May 20, according to the will of the critical shareholder Karl-Walter Freitag, another vote on the dismissal of the supervisory board chairman Paul Achleitner should take place. Friday also demands, among other things, that CEO Christian Sewing withdraw his trust and cut the remuneration for the members of the Supervisory Board, as is apparent from Reuters’ request for amendments to the agenda.


Which banks cut board remuneration in the crisis

London More and more top bankers in Europe are foregoing salary or bonuses in the corona crisis. The British big banks also gave up their resistance this week. HSBC, BarclaysLloyds RBS and Standard Chartered announced millions in donations to various corona aid funds.

The largest single sum comes from RBS boss Alison Rose. She waives 25 percent of her salary for the rest of the year and receives no cash bonus. That’s a total of around £ 2.3 million. Barclays boss Jes Staley’s contribution, on the other hand, is significantly lower. This gives up just 33 percent of his salary for six months – a sum of £ 392,000. With the bonus, however, he makes no compromises.

The institutes act under pressure from bank supervisors. “PRA does not expect banks to pay cash bonuses to management,” PRA chief Sam Woods said last week. The European banking regulator Eba had also asked all institutes to set management board remuneration at a “conservative level”.

The model was head of the board of directors Ana Botin of the Spanish Santander bench preceded on March 23. Last week was the Spanish one BBVA and the Italian banks Intesa Sanpaolo and Unicredit followed. With the gesture of the British institutes, the pressure on banks in Switzerland and Germany is increasing. So far, these have been preventing a waiver.

Selected major banks have previously announced this:

Santander: Chairman of the Board of Directors Ana Botin and CEO Jose Antonio Alvarez waive 50 percent of their total compensation for 2020, i.e. fixed salary and bonus. The rest of the Board of Directors waived 20 percent.

Intesa Sanpaolo: CEO Carlo Messina donates one million euros to Corona relief funds. 21 other top managers who report to him donate a total of five million euros.

Unicredit: CEO Jean-Pierre Mustier and seven other board members waive their cash bonuses for 2020.

HSBC: Chairman Mark Tucker donates his entire annual salary of £ 1.5 million. CEO Noel Quinn and CFO Ewen Stevenson waive 25 percent of their fixed salary for six months and receive no cash bonus. Quinn has around £ 1.4 million and Stevenson £ 800,000.

Barclays: Chairman Nigel Higgins, CEO Jes Staley and Chief Financial Officer Tushar Morzaria waived 33 percent of their salary for six months. However, bonuses are paid. In total, all three managers donated a total of £ 800,000.

Standard Chartered: CEO Bill Winters donates 50 percent of his salary by the end of the year and his cash bonus for 2020 – a total of over two million pounds. CFO Andy Halford and board members also waive. However, the amount is unclear.

Lloyds: CEO Antonio Horta-Osorio and other managers waive the full bonus, both cash and stock options. However, they get their full salary.

RBS: Chairman Howard Davies and CEO Alison Rose waive 25 percent of their salary for the rest of the year and receive no cash bonus. RBS was saved by the state in the financial crisis and is still majority state-owned.

UBS: The Swiss bank announced on Thursday that it would pay its dividend in two tranches this year. Should the second tranche fail in autumn due to the corona crisis, the cash bonus for the board members will also be canceled, the bank said. Additional remuneration decisions will be made “as required” in the course of the year.

Credit Suisse: CEO Thomas Gottstein told Swiss radio last week that the board is considering a gesture of solidarity.

Deutsche Bank: So far, the board members have kept a low profile, it just says “one is aware of the overall situation in business and politics.”

Commerzbank: The board members have not yet waived their variable remuneration.

More: Because of the corona crisis: More and more board members are foregoing part of their salary


EBA urges banks to cut bonuses and dividends

Frankfurt The European banking regulator Eba has clearly called on the continent’s financial institutions to support the European economy in the corona crisis – at the expense of bonuses and dividends. Before the Eba, several banking supervisors, including the European Central Bank, but also Bafin, had made similar appeals to the industry. The statements of the Eba are particularly striking.

“Eba emphasizes that the capital relief measures that regulators have implemented in response to the Covid 10 crisis must be used to fund businesses and households, not to distribute dividends or share buybacks to reward shareholders, ”said the Paris-based EU authority on Tuesday evening.

The Eba itself has few rights of access and supervision to individual banks in Europe, but essentially coordinates the work of the supervisory authorities throughout the European Union.

Indirectly, Eba also asked the banks to concentrate their business activities primarily on their home market and Europe – and less outside this region. “The distribution of capital within a banking group should serve the need to support the local and broader European economies, as well as the good functioning of the internal market,” said Eba. “This is particularly important in this time of crisis.”

Even during the financial crisis, financial institutions all over the world had provided customers in their home markets with financing. The call of the Eba hits exactly this notch. Many money houses, such as the major Spanish bank Santander, also have major activities in countries such as Latin America.

Santander bosses are doing without

From the authority’s point of view, not only the shareholders, but also the employees of the banks should contribute to coping with the corona crisis. “The responsible supervisory authorities should ask the banks to review their remuneration policies,” emphasized Eba. Bank supervisors should ensure that they reflect the current economic situation. “The remuneration and, especially, its variable portion, should be set at a conservative level,” said Eba.

The agency supplied a few ideas of how this could look like. “In order to adequately match the risks arising from the Covid 19 pandemic, a larger part of the variable remuneration could be deferred for a longer period and a larger part could be paid out in the form of equity instruments,” said Eba .

The head of banking supervision at the European Central Bank, Andrea Enria, had previously also called for a reduction in bonus payments to employees. Unlike the Eba, however, he put this appeal into perspective by saying that the bonuses were less of a problem than the dividends given the amount of capital required.

The major Spanish bank Santander set a good example a week ago. Ana Botín, the head of the board of directors, and CEO José Antonio Álvarez will waive half of their total salary, i.e. fixed salary and bonus, in the 2020 financial year. The individual country heads should also make their contribution. The dividend was also canceled. In addition, the bonus policy should be checked so that as much funds as possible could benefit customers.

German banks are hesitant

German banks, on the other hand, have so far been very hesitant to respond to the various appeals by bank supervisors or politicians. Only after repeated appeals to the dividend from the supervisory authority did Commerzbank announce that it would cancel its planned distribution. Real estate financier Aareal Bank has still not really committed to this. And German banks and savings banks are also hesitant when it comes to the request of the banking supervisors to support the real economy.

Banks and savings banks “could not throw regulatory requirements or their commercial diligence overboard,” stressed the president of the Federal Association of German Volksbanks and Raiffeisen Banks (BVR), Marija Kolak, shortly before the Eba statement was published. “This would be counterproductive and is of no use to companies or citizens. It would also not contribute to financial market stability. ”This year, the BVR is the leader of the banking association Deutsche Kreditwirtschaft. That is why Kolak spoke for all German banks.

Kolak’s statements had criticized Federal Finance Minister Olaf Scholz (SPD). Scholz had previously asked the house banks not to place excessive demands on small business loans in the corona crisis. Every bank employee should know that “this is now a great, joint, national effort that is necessary where everyone has to leave a little bit of a fifth, so to speak.”

Before BVR President Kolak, Sparkasse President Helmut Schleweis had already made it clear that the savings banks were not prepared to support the companies with loans at any price. As part of the loan program of the state development bank KfW, only those companies could be granted loans that are expected to be able to repay the loan within five years, Schleweis said in an interview with the Handelsblatt. “This is currently not the case for many companies from industries that are suffering particularly badly from the corona crisis.”

Greens politicians face consequences

Greens MEP Sven Giegold welcomed the Eba statement. “It is gratifying that the EBA is not only targeting dividends and share buybacks, but also variable remuneration,” he said. Across Europe, bank regulators must not allow banks to redirect the recent easing of capital requirements into generous distributions. In the current crisis, shareholders “to be blessed with a shower of money” are short-sighted and indecent.

Giegold also warned of possible consequences if they should stick to their planned distributions. “The longer the economic standstill from the corona pandemic lasts, the greater the losses the banks will suffer. Institutions that do not now have reserves do not have to call the state in a few months if there is a problem. ”

More: Financial supervision decides comprehensive relief for banks in the corona crisis


Allianz supervisory boards want a huge increase in salaries

Munich In the middle of the corona crisis, the supervisory board of the alliance with the demand for a 20 percent higher fixed remuneration. The twelve-member committee wants to have it approved at the Annual General Meeting on May 6. This is clear from the insurer’s agenda. Item 6 of the otherwise rather unspectacular agenda states: “Remuneration of the members of the supervisory board of Allianz SE and corresponding amendment to the articles of association”.

The Allianz Supervisory Board is composed of six representatives from the capital side and the employee representative body. Chairman of the Supervisory Board Michael Diekmann would therefore receive an annual fixed remuneration of 300,000 euros, up to now it was 250,000 euros. His two deputies Jim Hagemann-Snabe and Gabriele Burkhardt-Berg would come to 225,000 euros instead of previously 187,500 euros, the nine other supervisory board members to 150,000 euros instead of 125,000 euros.

The clear plus is justified among other things with the payment with other large insurers. “In view of the size, complexity and sustainable performance of Allianz, the amount of compensation for the Supervisory Board is based on the fourth quartile of the compensation of comparable companies,” says the invitation to the Annual General Meeting.

The business and financial situation of Europe’s largest insurer also serves as a justification. Last year the group had the highest at around 11.9 billion euros operating result of its history. Profits bubbled in all three areas – property insurance, life and health, and wealth management.

What is striking is the current wish of the supervisors for more money, however, against the background that the committee had a full 25 percent salary increase approved only two years ago. From a legal perspective, the law implementing the second shareholder rights directive stipulates that the general meeting must deal with the remuneration of the supervisory board every four years.

Back then, with similar reasons, the chairman of the supervisory board, Michael Diekmann, had an annual increase in fixed remuneration from 200,000 euros to 250,000 euros. His deputies got their salary increased from 150,000 euros to 187,500 euros. For regular members of the Supervisory Board, there was 125,000 euros instead of 100,000 euros.

Additional remuneration remains

In contrast, the additional remuneration received by Allianz’s supervisory boards remains unchanged if they serve on other committees. The most important committee, the examination committee, thus receives an additional 50,000 euros for ordinary members and 100,000 euros for the chairman. For all other committees on personnel, risk, technology and the standing committee, the remuneration amounts to 25,000 and 50,000 euros for the chairman. In the newly created nomination committee, the additional earnings are 12,500 and 25,000 euros.

This week, the Board of Management and the Supervisory Board of Allianz also want to decide in which format the Annual General Meeting on May 6th should take place. So far, a face-to-face event has been planned, which, however, is no longer expected at Allianz due to the continuing high risk of infection in the badly affected region of Upper Bavaria.

Over the past few years, well over 3000 shareholders have gathered in the Munich Olympiahalle. The first virtual shareholder meeting in the insurer’s 130-year history could now take place.

The federal government passed a legislative package on Friday that also includes changes to the rules for general meetings. If certain conditions are met, these can now take place without the physical presence of the shareholders and their proxies, in order to avoid the gathering of people.

More: Allianz chief salary has almost halved.


Greens demand ban on dividends for banks

Brussels The season of the general meetings begins with the spring at the banks – and with it the hour of dividends and bonuses. Several German money houses have already signaled that there should be distributions to shareholders and employees.

In times of crisis, the institutes are on politically sensitive territory. The corona pandemic will also have negative consequences for banks. The longer the crisis lasts, the greater the risk of corporate and private bankruptcies – with corresponding consequences for the balance sheets of financial institutions: you would have to write off more bad loans.

European banking supervisors are well aware that the money industry could face significant problems. On March 12, the European banking regulator Eba asked the institutes to pursue a “prudent distribution policy”. This also applies “for variable remuneration”.

The same day, the ECB’s banking regulator warned the money houses not to “increase their dividends and variable remuneration”. On March 24, the German supervisory authority Bafin recommended that the institutes postpone share buybacks and handle “dividends and bonuses responsibly”.

Politicians are now under increasing pressure not to leave it at vague recommendations of this kind. The Greens in the European Parliament are demanding that regulators ban dividends and bonuses this year.

“If the banks do not act responsibly in this severe crisis, the supervisory authorities must make full use of their powers and strictly restrict dividend payments, share buybacks and bonuses,” said MEP Sven Giegold. This had to be done in good time before the general meetings, because the recommendations for the votes had already been given.

In Germany, according to the current status Commerzbank, the Aareal Bank and the Deutsche Pfandbriefbank will pay dividends for the past financial year. The Deutsche Bank however, had already decided against a dividend before Corona because of the ongoing corporate restructuring.

Aareal Bank has meanwhile announced that it will reconsider the planned dividend of two euros per share. However, the recommendation has not yet been paid for. One will follow the current developments in connection with the corona crisis “attentively” and “evaluate responsibly”, it said in a statement. Commerzbank does not currently want to move away from its plan to distribute 15 cents per share.

The Federal Association of German Banks was open to cuts. “Given the high dynamics of the corona crisis, a suspension of dividend payments for 2019 should not be ruled out,” it said in a statement. In this way, the banks would make a contribution to maintaining their performance for customers.

As a result of the corona crisis, southern European banks are likely to face even greater difficulties than German banks. They had struggled to get rid of bad loans in recent years.

The proportion of unused loans in the balance sheets now threatens to rise sharply again. This initially leads to a higher risk provision, in the end, large-scale depreciation could also follow. In the end, this also affects the capital of the institutes. Experts therefore do not rule out that individual banks have to apply for help from the national or European bank rescue fund as a result of the corona crisis.

Outside the EU, too, the question is being asked whether banks can still pay dividends and bonuses in this situation. The Norwegian banking regulator has asked the government in Oslo to ban all distributions. A recommendation by the Norwegian regulator to waive dividends had not previously been effective at all institutions.

More: The rating agency Moody’s warns of corona risks for Europe’s banks.


Greens are calling for bonuses in retail and healthcare to be tax free

Meetings of the parliamentary groups

Katrin Göring-Eckardt, group leader of Alliance 90 / The Greens, demands tax-free premium payments for employees in the retail and healthcare sectors.

(Photo: dpa)

Berlin To support employees in the retail and healthcare sector in the Corona crisis, they should be able to receive tax-free bonus payments from the Greens perspective. “People in the retail and healthcare sectors are currently doing an important job for society as a whole,” said the head of the Greens parliamentary group, Katrin Göring-Eckardt, of the German Press Agency. “Your hard and currently risky work deserves more recognition.” The federal government should support bonus payments in retail and healthcare and exempt such bonus payments from tax during the Corona crisis.

The German Trade Association (HDE) had also asked for a tax exemption for special payments for employees. Finance minister Olaf Scholz (SPD) said on Tuesday at “Bild live” that his ministry was examining whether the bonuses could be exempt from tax up to a certain amount. In a certain framework, this could probably work quickly and unbureaucratically through the tax offices.

Göring-Eckardt also appealed to retailers not to wait for Finance Minister Scholz to pay premiums. “The supermarket chains are currently making big sales,” she said. “With all the right rescue packages for business and companies, we must not forget the people who are personally at the forefront every day in this crisis.”

Federal Minister of Labor Hubertus Heil demanded higher wages for cashiers and carers. “We are seeing an incredible number of everyday heroes. They deserve not only warm words, but also better wages in the long term, ”the SPD politician told the newspapers of the Funke media group (Wednesday). “Wherever possible, higher wages should now be paid for cashiers. But that cannot be prescribed by the state. “

More: The federal government wants to support companies affected by the corona crisis. But when and who does the state really help? Answers to the most important questions.


DWS warns of negative consequences from the corona crisis

Deutsche Bank subsidiary

DWS sees negative effects from the corona crisis.

(Photo: Reuters)

Frankfurt The Deutsche Bank subsidiary DWS fears the corona crisis. The fund company could be significantly affected by the economic conditions, DWS warned in its annual report on Friday.

However, it was too early to be able to quantify the consequences for the business or the financial goals. With the slump in stock prices, the entire industry is suffering from the decline in assets under management and fee income.

After the adjusted pre-tax profit increased by 24 percent to 774 million euros in 2019, DWS wants to pay its shareholders a dividend of 1.67 euros per share, 30 cents more than in the previous year, as the asset manager confirmed.

The main beneficiary is the Deutsche Bank, which still holds around 80 percent of DWS after the IPO in March 2018.

More: The head of Deutsche Börse is to become the supervisory board of Deutsche Bank.