Deutsche Bank AG, Germany's largest bank, reduced the pay of its management board by 19 percent after missing its profit goal last year.

The board's seven members received 26.4 million euros ($34.9 million) in salary and bonuses for last year, compared with 32.4 million euros in 2010, when there were eight members, Deutsche Bank said today in a statement on its website.

Financial firms worldwide are facing public and political pressure to limit bankers' compensation after taxpayers were forced to bail out the industry during the financial crisis. Deutsche Bank, which didn't require direct state aid, announced 500 job cuts at the investment bank in October to reduce costs as tougher regulation weighs on profitability. Morgan Stanley, Credit Suisse Group AG and Citigroup Inc. have all reduced senior investment bankers' pay for last year as revenue slows.

Chief Executive Officer Josef Ackermann's pay was almost unchanged at 6.3 million euros, according to the annual report. Anshu Jain, who runs the investment bank and takes over as co- CEO at the end of May, earned 5.81 million euros, down from 7.55 million euros. Juergen Fitschen, who heads Germany and will become co-CEO with Jain, was paid 2.85 million euros, compared with 2.99 million euros. The management board shrank by one member when Michael Cohrs, the former co-head of the investment bank, retired on Sept. 30, 2010.

The German bank missed a goal of doubling pretax operating profit to 10 billion euros last year from 2009 levels as Europe's debt crisis curbed trading. Net income slid 76 percent to 147 million euros in the fourth quarter as the investment bank posted a 422 million-euro pretax loss.

Deutsche Bank cut pay for employees at the corporate and investment bank by 15 percent in 2011, setting aside 5.05 billion euros for compensation and benefits, compared with 5.91 billion euros in 2010, according to company filings last month. That was enough to pay an average of 332,785 euros to the 15,184 employees at the division, which includes transaction banking, down from 378,659 euros a year earlier, the documents show.

Barclays Plc cut CEO Robert Diamond's remuneration by almost a third last year and froze his salary for 2012 after the lender missed its profitability target. Diamond received 6.3 million pounds ($10 million) in salary, bonuses and stock last year, making him Britain's second-best paid bank CEO after HSBC Holdings Plc's Stuart Gulliver, with 7.16 million pounds.Deutsche Bank shrank its bonus pool by 17 percent, Ackermann told reporters Feb. 2. Bankers will receive 37 percent less cash than last year as part of their bonus, while about 61 percent of the total amount will be deferred, he said.

The bank told employees it will impose a 200,000 euro cap on bonuses paying out this year, three people with knowledge of the discussions said last month.

Staff will receive as much as 100,000 euros in cash and 100,000 euros in stock they won't be able to sell before August, the people said, declining to be identified because the talks were private. Any further bonus will be deferred over three years, they said. The limit will apply to employees across the company, including the investment bank, one of the people said.

Volkswagen AG's Martin Winterkorn, who led the world's second-largest carmaker to a record profit last year, earned 17.5 million euros to top the rankings as the best-paid CEO among companies on Germany's benchmark DAX Index.

Bloomberg News

Instant Insights /

Deutsche Bank Cuts Board's Pay

Related Stories

Recommended For You