One in four Deutsche Bank staff will receive no individual bonus for 2016, the firm said yesterday, leaving many of its bankers fearing a significant hit to their pay.
The German giant's bonuses are usually determined by an employee's success, or failure, in hitting a range of targets. But after a tumultuous year, the bank has scrapped the "individual" element of its bonus pool for anyone with vice president, director or managing director in their job title.
Deutsche admitted the changes would affect roughly 25 per cent of its 100,000 workers. The bank said it could still reward all its staff via a "group" bonus pool, reflecting the company's financial position. Final bonus calculations are expected to be completed by March.
The bank this week settled a $7.2bn payment to the US Department of Justice for mis-selling mortgage-backed securities in the run-up to the financial crisis. Deutsche endured a rocky 2016, with its share price crashing more than 50 per cent by the end of September. However, it has regained most of that ground in recent months and, with the DoJ settlement out of the way, many bankers expected a more generous payout.
"We are aware that many of you will be disappointed by this decision about 2016 bonuses. We know how hard you work for the bank," read a message sent to staff, signed by members of the bank's executive team, including chief exec John Cryan. "We recognise how committed you remained throughout the challenging days in the autumn – and indeed not only then.
"Today we are able to say that our bank is resilient thanks to your hard work and dedication. Unfortunately, this recognition will not be reflected in the amount of individual variable compensation this year. We sincerely regret this."
The bank said it would pay additional awards to a limited number of staff in key roles who it can ill-afford to lose.