Commerz bank wins ruling to withhold Dresdner bonuses

City A.M. Reporter
A COURT in Frankfurt yesterday backed Commerzbank chief executive Martin Blessing&rsquo;s campaign against excessive bonus payments when it struck down claims by 13 Dresdner Bank employees over bonuses.<br /><br />Current and former employees of Dresdner Bank sued parent company Commerzbank for its refusal to pay out claims ranging from &euro;29,166 to &euro;450,000 , totalling around &euro;2m.<br /><br />Dresdner Bank had pledged to pay the bonuses in December 2008, but Commerzbank, which completed its takeover of the bank in January 2009, slashed this bonus pool by 90 per cent, citing a material change of economic conditions. In a statement, the regional Frankfurt court held that the letters in which the bonuses are assured were not legally binding.<br /><br />Thanks in large part to the losses run up by the investment banking operations at Dresdner Bank, Commerzbank posted a &euro;6bn loss in 2008 and was forced to seek an &euro;18.2bn euro bailout from the German government. Blessing has repeatedly called for an to end to guaranteed bonuses for investment bankers and is in the process of overhauling the way bankers are rewarded to introduce a clawback option.