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Well prepared for the downturn: Deutsche Bank is shrinking its bonus pot

Thanks to its corporate restructuring, Deutsche Bank sees itself better equipped for an economic downturn as a result of the corona crisis.

However, it is currently “not yet possible to assess all the consequences for the overall economy,” said CEO Christian Sewing on Friday. The annual report says that a sustained downturn could have a significant negative impact on the bank.

Last year, the restructuring of the group tore deep holes in the balance sheet of Germany’s largest financial institution. The bottom line was around 5.7 billion euros as a minus. Despite the fifth consecutive loss year, the bank continues to pay bonuses – albeit significantly less than a year earlier. Such payments keep causing criticism, which is why the bank wants to revise its remuneration system.

The variable remuneration for employees for 2019 shrinks by a good fifth (22 percent) from EUR 1.9 billion to EUR 1.5 billion compared to the previous year. This can partly be explained by job cuts. At the end of last year, the group had 87,597 (previous year: 91,737) full-time employees. 583 (643) employees receive more than one million euros in total remuneration – one of them, according to the annual report, has more than 13 million euros.

The total remuneration for the Executive Board, which consisted of eight managers on average, amounts to around 36 million euros for 2019. That is a third (35 percent) less than in the previous year. The then ten board members had received 55.7 million euros. A large part is paid with a delay, depending on the success of the company.

CEO Christian Sewing had already announced at the end of January that the Management Board would waive part of the performance-related remuneration for 2019. The bonus pot for the Management Board was now around 13.3 million euros, about half the size of a year earlier (around 26 million euros).

Sewing’s total remuneration for 2019 amounts to a good 5.0 million euros – after 7.0 million euros a year earlier. Almost as much (4.9 million euros) was collected by the former head of investment bank and group vice president Garth Ritchie, who had left the bank on July 31.

In turbulent times, the bank strengthens its supervisory board with another prominent representative: Deutsche Börse boss Theodor Weimer is to move into the supervisory board. The 60-year-old will propose to the shareholders for election at the Annual General Meeting on May 20. In January, Deutsche Bank had already nominated ex-SPD boss Sigmar Gabriel for its supervisory board. Gabriel was legally appointed for the post in March and will also stand for election at the shareholder meeting in May.

Weimer is repeatedly mentioned in media reports as a possible successor to Deutsche Bank supervisory board chairman Paul Achleitner. Like Achleitner, who was elected until the 2022 Annual General Meeting, Weimer worked for the US investment bank Goldman Sachs in previous years. However, Weimer’s nomination for the Supervisory Board of Deutsche Bank promptly triggered criticism: “Theodor Weimer is undoubtedly an asset to the Supervisory Board of Deutsche Bank. But as long as he is the head of Deutsche Börse, it is a crystal-clear conflict of interests, »said Ingo Speich from the fund company Deka Investment to the« Handelsblatt ». The head of the stock exchange must be as neutral as possible, said Speich.

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