Ex-Dresdner boss defends bonus policy
DRESDNER Bank kept its staff working hard by offering a minimim bonus pool months before it confirmed individual guarantees, a former executive told the Commerzbank trial yesterday.
Stefan Jentzsch (pictured), previously head of Dresdner’s investment banking arm, defended the decision to create a €400m (£331.9m) bonus pool for 2008 because of the need to prevent staff defections and ensure “operational stability”. At the time the markets were deteriorating and Allianz, then the parent company, was considering selling or winding down the division. In an “extreme case”, Jentzsch said, bonuses should be awarded to the best staff even if their department closed.
He admitted, however, that the guarantee of an individual bonus did not become binding until bankers received confirmation on “letter day”.
“We wanted people to retain a certain amount of uncertainty about how much they would be paid to make them work hard.”
A group of 104 former Dresdner investment bankers are suing Commerzbank for €50m and claim it reneged on contractual promises made to staff in internal meetings in 2008 as well as in letters. The German bank said the switch became “necessary” as markets slumped.
When Jentzsch was asked about Allianz’s statement on the future of Dresdner’s investment bank, he denied that staff had to be wary of his “blandishments” but accepted he had put a “positive spin” on it.
“You take joint decisions and have joint responsibility… You have a duty.”
The trial continues.