Deutsche Bank has expanded a sliding pay scale forcing senior bankers to defer a larger proportion of their bonuses.
It is understood that at least a quarter of all 2009 bonuses above €100,000 (£87,194) will be deferred. The deferral rate goes up as bonuses rise, forcing managing directors to have 50 to 70 per cent of their bonuses deferred. The marginal deferral rate will rise to as much as 90 per cent.
About 75 per cent of the deferred compensation will be in stock and 25 per cent in cash. The equity portion will be paid out over a period of almost four years, and the cash portion over three years. This is in line with G20 guidelines on remuneration.
Germany’s biggest bank announced it had revamped its payment policy to meet regulatory guidelines when it reported its results on 4 February. Its total compensation bill came to €11.3bn for 2009, and it set aside €225m to pay the one-off supertax on bonuses in London.
The bank has also expanded a clawback programme to include all managing directors. They now face possible clawback on the cash part of their deferred pay if losses occur at a later date. This means about 2,000 staff are now subject to clawback provisions.
European banks have come under intense scrutiny on their bonus payouts, after many were bailed out with taxpayers’ money at the height of the financial crisis. Deutsche’s chief executive Josef Ackermann has warned of a regulatory and political “backlash” if the banking industry does not change its pay practices.
Deutsche, which did not need state aid, is increasing employees’ basic salaries by five to 30 per cent and reducing bonus payments by an equivalent amount.
Deutsche declined to comment.