Deutsche Bank Slashes Bonuses After Hefty Loss -- 2nd Update
March 20 2017 - 7:18AM
Dow Jones News
By William Wilkes
FRANKFURT-- Deutsche Bank AG slashed bonuses paid to staff by
80% last year after the German lender suffered its second
consecutive full-year loss.
Bonuses for 2016 will fall to EUR546 million ($588.2 million) at
constant currencies from EUR2.4 billion in 2015, the bank said in
its annual report.
It made a net loss of EUR1.4 billion last year following a
tumultuous period when it was hurt by legal costs and worries about
its financial position. The bank said on Monday it expected 2017
revenue growth to be broadly flat compared with 2016.
The German lender's management board said in January that many
of its senior staff wouldn't receive 2016 bonuses, and that "tough
measures are unavoidable" as it set about cutting thousands of jobs
and stopped its dividend payment to shareholders.
It is launching a EUR8 billion capital increase that many
investors considered was inevitable, given Deutsche Bank's
financial position. It fleshed out those plans on Sunday, saying it
would issue 687.5 million new shares at EUR11.65 each.
Citibank analysts said the share issue implies shareholders will
see the book value of their shares diluted by 23%.
Deutsche Bank's shares trade down 3% on Monday.
Chief Executive John Cryan wrote in a letter to shareholders
that 2016, "was a very challenging year for us at Deutsche
Bank."
The bank has since angered some investors with plans to raise
EUR8 billion in fresh capital.
Total pay, including fixed pay and bonuses, was down 15% last
year at EUR8.9 billion from EUR10.5 billion in 2015.
Mr. Cryan has previously said the bonus cuts were "the right
thing to do, " and that the bank planned to return to normal
compensation programs for 2017.
Analysts applauded Deutsche Bank's suspension of bonuses, but
morale among Deutsche Bank employees has suffered and senior
bankers and traders have left the bank for competitors.
Deutsche Bank isn't paying 2016 bonuses to its co-CEOs and other
management-board members, as announced in January. Mr. Cryan and
the management board's 10 other members also waived their bonuses
last year.
Ordinary management board compensation, including salary,
pension and other benefits, remained at EUR2.4 million. Overall
2016 management-board compensation rose 14% to EUR25.9 million,
however, due to the body having an additional member in 2016.
The lender said Mr. Cryan's total 2016 compensation was EUR3.8
million. He received EUR1.9 million for 2015, having joined the
board in July of that year.
(END) Dow Jones Newswires
March 20, 2017 07:03 ET (11:03 GMT)
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