Deutsche Bank CEO tops Germany's pay listings
FRANKFURT (Reuters) - Deutsche Bank chief executive Josef Ackermann got 70 percent of his 9.55 million euro ($13 million) pay for 2009 as performance-related compensation, reflecting a change in the way banks reward executives likely to be mirrored elsewhere.
Germany's largest lender raised the proportion of deferred and performance-related compensation in response to new rules and released bonus details ahead of peers Barclays, Credit Suisse and Royal Bank of Scotland.
Politicians from the Group of 20 countries drafted new bonus rules in the wake of the global financial crisis in an attempt to discourage short-term risk taking mainly by deferring payouts and by introducing claw-back options. Although Ackermann's paycheck marks the biggest 2009 award for a German executive disclosed at a blue-chip company so far, his base salary was 1.15 million euros, or only 12 percent of the total.
Amid an uncertain outlook for investment banking in 2010, Deutsche said a larger proportion of management pay would be fixed rather than variable from 2010 onward.
Ackermann saw his pay vault from 1.4 million euros in 2008, showing that bankers' pay can be more volatile than in other sectors such as the auto industry where loss-making Daimler paid its CEO Dieter Zetsche 4.2 million euros in 2009, down from 4.8 million in 2008.
Ackermann's remuneration tops the 9.2 million euros received by Germany's previous top earner so far, RWE chief Juergen Grossmann as well as that of Anshu Jain, currently head of Deutsche Bank's global markets division, the company's biggest profit generator in 2009.
Jain head of the investment banking division earned 7.79 million euros while co-head Michael Cohrs earned 3.22 million euros in 2009.
The scale of payouts for bankers has been raising eyebrows on the high street, which is still reeling from the credit crisis.
The ire directed at Deutsche - which did not need a bailout - is likely to be less severe than at loss-making Swiss rival UBS, which paid big bonuses despite needing a government rescue during the crisis.
Carsten Kengeter, who heads up the Investment bank at UBS, was paid just over 13 million Swiss francs, even though the unit booked a pretax loss of 6 billion francs in 2009.
Investment banks boosted earnings in 2009 in part thanks to government measures including short selling bans on financial stocks, looser collateral rules, and fiscal stimulus measures.
Deutsche's corporate and investment bank generated 4.3 billion euros, or 83 percent of Deutsche Bank's 5.2 billion euros pretax income in 2009.
In 2008 the corporate and investment bank made a 7.4 billion euro pretax loss and the group made a 5.7 billion euro loss.
Deutsche Bank paid out a total 11.3 billion euros to its employees in compensation and benefits in 2009. Of that, almost 2.6 billion euros in cash and deferred pay went to bankers who can create "high risk positions" that could result in high losses or profits, it said.
Deutsche Bank yesterday reiterated ambitious targets to reach pretax income in its core businesses for 2011 of 10 billion euros at group level.
Elsewhere, profitable banks such as Goldman Sachs and Barclays decided to limit or forego bonus payments in an attempt to mute public criticism of the banking industry, which is being blamed for causing the economic crisis.
By contrast John Stumpf, CEO at Wells Fargo & Co, received compensation worth $21.3 million for 2009, prompting President Obama's pay czar Kenneth Feinberg to question the bank's remuneration practice.
A battle with regulators over a $100 billion pay package prompted Citigroup Inc to sell its Phibro energy trading business to Occidental Petroleum Corp.
Top bosses at Barclays also turned down multimillion-pound bonuses despite posting bumper profits, while the chief executives of Royal Bank of Scotland and Lloyds Banking Group - which required bailouts - waived their bonuses in response to public pressure.