Bonus Watch '10: Zee Germans Will Be Clawing Back

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To: Group Internal Communications
Sent: 02/04/2010 04:15 AM
Subject: Compensation
The German follows the English text / Die deutsche Übersetzung folgt im Anschluss
Dear Colleagues
Our industry is still facing tremendous public debate in the aftermath of the disruptions caused by the financial crisis, particularly in regard to compensation principles, bonus payments, banking taxation and both the current and future regulatory landscape.
Against this backdrop, we at Deutsche Bank have been engaging with politicians and regulators in public and private. On the specifics of compensation, we were early endorsers of the G20 Finance Ministers / FSB principles on compensation and announced that we would apply them, where we were not already doing so, to the 2009 compensation cycle. Thus, we are positioned as an industry leader and among a set of internationally successful banks who responsibly endorse the long term sustainability of their businesses and the industry.
Today we want to communicate the key elements of our compensation structure. These are:
* We will continue to pay our people competitively based on business performance, adjusted for capital and risk.
* A significant proportion of compensation will, where applicable, be deferred. Deferred compensation will be a combination of restricted equity awards (75%) and restricted incentive awards (25%).
* The restricted equity award will vest in nine equal instalments over 3¾ years, while the restricted incentive award will vest in three equal instalments over three years.
* All restricted equity and restricted incentive awards will continue to be subject to claw-back in the case of policy/regulatory breach.
* All restricted incentive awards will be subject to claw-back in the event of significant financial impairment.

* All restricted incentive awards for Managing Directors will also be subject to a claw-back linked to future multi-year financial performance of DB.
* For certain senior employees, there will be a shift in pay from variable compensation (bonus) to fixed pay (salary) starting this year, in order to achieve a more balanced distribution of their total compensation. Any change to this 'pay mix' will not be automatic and will only apply in those cases where an employee's current mix of pay is not appropriate to their function, seniority and performance.
* Employees who are not eligible to be considered for the above-referenced pay mix review will be eligible for a salary review as normal.
You will find out more about these changes next week on Tuesday 9 February, when individual compensation details will be communicated to you. At that time your Manager will provide you with more details about how these changes may affect you.
We strongly believe that our actions demonstrate that Deutsche Bank's compensation strategy is based on sound principles, remains competitive and appropriately recognises and rewards exceptional performance.
Regards
Josef Ackermann
Hermann-Josef Lamberti

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