German bank boss spurns a bonus

By Nadja Brandt  |   2008-10-18  |     NEWSPAPER EDITION

DEUTSCHE Bank AG Chief Executive Officer Josef Ackermann plans to forgo his 2008 bonus, a company spokesman said, as banks in Europe, the UK and the US grapple with the worst financial crisis since the Great Depression.

Ackermann, 60, announced he will waive his bonus in favor of "deserving" colleagues, the German newspaper Bild said, Bloomberg News reported. He received a bonus and shares worth about 12.7 million euros (US$17 million) last year, the firm's annual report shows. Three other management-board members will also go without bonuses this year.

Bank executives' pay has drawn scrutiny in Europe and the US as regulators pursue plans to rescue firms crippled by the global credit crunch. US law makers lambasted Richard Fuld, the CEO of Lehman Brothers Holdings Inc, at an October 6 hearing for reaping hundreds of millions of dollars in compensation before the New York securities firm filed for bankruptcy in September.

"I have told Deutsche Bank's supervisory board that I'm renouncing my bonus in this difficult year in favor of deserving employees that need the money more than I do," Bild quoted Ackermann as saying. This year's bonus would be worth "a few million," he added.

Deutsche Bank's 20-member supervisory board will also forgo its so-called variable pay, spokesman Christian Streckert said yesterday from Frankfurt.

Wall Street CEOs have sought to dispel investors' anger over pay by turning down bonuses. Fuld and Lehman President Herbert "Bart" McDade said in June they'd go without payouts for the year. Morgan Stanley chief John Mack didn't take his annual bonus last year after the second-largest independent US investment bank logged a US$9.4 billion writedown on debt securities and posted a fourth quarter loss he called "embarrassing."

In Europe, UBS AG Chairman Peter Kurer said he will "most probably not get a bonus for this year because we will have a loss." Officials at Commerzbank AG, Germany's second-biggest lender, and Deutsche Postbank AG declined to say if their CEOs will follow Ackermann.