Picture, if you will, a group of very sober and well-meaning AIG board members traipsing up the steps of Hank Greenberg's Park Avenue office, tapping at his door, and requesting that the ornery old man entertain the notion of handing some money – maybe just $20 or $30 million or so! – back to the company in order to partially recoup the regulatory fines incurred in the wake of his management. Like, please?
You can imagine for yourself what kind of gruff, four-lettered response they might receive from the former executive who once sued the American government for having the gall to save the company he ran into the ground.
Anyway, things are different in Germany:
Deutsche Bank is expected to keep roughly €38 million ($45 million) in deferred and unvested compensation from 11 mostly former management board members, who have agreed to give up the pay in light of the lender’s past legal problems, according to people familiar with the matter.
You may recall that this “arrangement” first got off the ground a few months ago, when a management team still wallowing in the regulatory latrine dug by their predecessors decided that, well, we're Germans after all, and if there's one thing Germans reliably do right it's guilt. So why not try to arrange a trade with ex-board members: we'll give you shame, and you let us keep your money. (Recall that schuld, the German word for debt, can also mean guilt.)
Remarkably, the gambit worked:
The agreement, which may be announced Thursday afternoon, pending supervisory-board approval, is considered a “voluntary contribution” by the 10 former and one current management-board member, the people said.
Of course, $45 million isn't exactly enough to make up for everything Deutsche has had to pay for its Libor rigging, its Russian money laundering, its subprime mortgage sadomasochism, etc. In fact, the withheld compensation represents just 0.3 percent of the nearly $15 billion that Deutsche has disgorged to regulators since 2008.
But this ritual isn't designed to be material in an accounting sense. It's a symbolic move, a sort of exorcism of bad juju designed to signal to shareholders that the old gods have been tamed and a new order of justice and probity now obtains. And lacking good news in substance, Deutsche shareholders can use all the symbolic victories they can get.