Bonus Watch '17: Deutsche Bank Bonus Pool More Like A Sad, Shallow Shower Puddle Of Bonuses

Deutsche Bank's mismanagement of this year's bonus season is like a new form of performance art.

Bonus season can be a real morale minefield for even the healthiest of financial firms. As the saying goes; "You can't please all the people all the time...even after 4 super-strong consecutive quarters and some canny cost reductions."


Suffice it to say, no firm ever truly "wins" bonus season...but also no firm has maybe ever truly "lost" it like we are watching Deutsche Bank lose it right now. What Deutsche has done with bonuses this year is one of the most staggering clusterfucks in the history of remuneration. John Cryan and his team seem to have approached the realities of this year with an almost baroque realpolitik but the whole thing has come off more like modern management Commedia dell'arte.

And the audience is about to start throwing fruit.

We all knew that Deutsche's bonuses were going to be ultra-light this year what with the bank dealing away the ability to pay large bonuses in order to settle with the DoJ over Deutsche's behavior a decade ago, a decision we've been mocking the bank real hard about for weeks. But even we didn't know it could still get worse...

Deutsche Bank AG cut its 2016 bonus pool by almost 80 percent, a figure unmatched in the bank’s recent history as it tries to recover from legal expenses that wiped out profit and eroded capital levels.

As they say in German "Ay yi yi."

The lender is reducing payouts with an eye toward shareholders and is aware it will be “frustrating” for employees, Chief Administrative Officer Karl von Rohr told Frankfurter Allgemeine Sonntagszeitung in an interview. The measures will affect about a quarter of the 100,000 staff, the German Sunday newspaper cited him as saying. The comments were accurately reported, a Deutsche Bank spokesman told Bloomberg on Monday in Frankfurt.

Frustrating sounds about right, and it's hard to believe that an 80% reduction will only affect 1 in 4 Deutsche Bankers. Finding out that your 2016 bonus is an Edible Arrangement because someone who doesn't work there anymore got a little creative with mortgages 10 years ago will be a real bummer, especially if anyone were cruel enough to mention that even the rank and file at Wells Fargo are getting 2016 bonuses.

But, hey, Cryan has a plan...

Some workers in key positions -- about 5,000 in all -- will get a special, long-term incentive tied to the bank’s performance that will paid out after as many as six years, von Rohr said.
Cryan told reporters this month that those awards were for “relatively few” people in revenue-earning areas, but also in “critical infrastructure functions and control functions where we are focusing a lot of our investment to improve the bank.”
The bank hopes to “resume normal service for the business year 2017” with regard to bonuses, Cryan said.

As he said it, Cryan felt 100,000 index fingers land on his lips and heard the voices of every employee mutter sadly, "Please, John, just...don't."

(Also, Deutsche Bank is still blocking me on Twitter, which is so dumb.)

Deutsche Bank Cuts Bonus Pool Almost 80% on Legal Costs [Bloomberg]