CEO Christian Sewing and others on the management board enjoyed an 88 per cent rise in total remuneration to 55.7 million euros in 2018
LONDON (Reuters Breakingviews) - Never underestimate Deutsche Bank’s ability to dig itself into a deeper hole. The lender had enough on its plate trying to persuade regulators and shareholders to sanction a merger with domestic rival Commerzbank.
Handing out lavish bonuses to its management board is going to incense trade unions who were already up in arms about the job cuts that the proposed deal would bring.
CEO Christian Sewing and others on the management board together enjoyed an 88 per cent rise in total remuneration to 55.7 million euros in 2018, with the difference mostly due to a rise in bonus payments, according to the bank’s annual report, which was published on Friday.
Sewing, who received seven million euros in total compensation, can at least argue that he isn’t the best paid. That dubious award goes to investment bank head Garth Ritchie whose compensation more than doubled to 8.6 million euros including an extra three million euros for additional responsibilities such as managing the bank’s Brexit preparations.
Such largesse will make life harder for the German government, which is keen on the deal. Trade unions are worried, given that any merger with Commerzbank would probably involve tens of thousands of domestic job losses.
It might also raise some eyebrows at Commerzbank. While the bank’s 2018 pay figures are not out until next week, its CEO earned less than half in 2017 than Deutsche’s head of admin did last year.
The pay bonanza is in stark contrast to Sewing’s predecessor John Cryan, who famously renounced his variable pay, along with the rest of the management board, for three consecutive years. Sympathy for the former CEO should be tempered by the fact that he pocketed 10.8 million euros in combined goodbye payments.
Sewing could argue that, unlike Cryan, he hit cost targets, the bank made a profit for the first time in four years, and the group bonus pool shrank. Even so, that pool is worth more than six times the lender’s 2018 profit.
Persuading shareholders and regulators to clear a deal with Commerzbank was always a big challenge. Such generous bonuses are a public relations own goal that Deutsche Bank could do without.