Deutsche Bank Slashes Bonuses After Hefty Loss -- 3rd Update

Date : 03/20/2017 @ 7:35AM
Source : Dow Jones News
Stock : Deutsche Bank Ag (DB)
Quote : 16.74  0.0 (0.00%) @ 9:33AM

Deutsche Bank Slashes Bonuses After Hefty Loss -- 3rd Update

Deutsche Bank (NYSE:DB)
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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.

The bank 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.

Deutsche Bank announced the drastic 2016 bonus cuts in January, saying they were necessary to help stabilize costs and to address huge losses that have hurt shareholders. The bonus cuts have hit employee morale and led to departures, people close to the bank say. Deutsche Bank has said it plans to resume what it considers normal pay levels by this time next year, but investors are concerned the cuts will continue to drive away talent, the people say.

The bank is launching a EUR8 billion capital increase that many investors considered to be 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 were 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."

Total pay, including fixed pay and bonuses, was down 15% last year at EUR8.9 billion from EUR10.5 billion in 2015.

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.

Jenny Strasburg contributed to this article.

 

(END) Dow Jones Newswires

March 20, 2017 07:20 ET (11:20 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.

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