Bankers revolt over bonuses at Deutsche

By Simon Evans

April 26, 2009

Senior bankers and board members at Deutsche Bank are considering their positions after heated rows over the decision not to pay bonuses at the group.

Deutsche Bank, which is expected to unveil first quarter profits this week of around €800m (£720m), is facing a revolt by angry managers furious at the decision of the chief executive, Josef Ackermann, to not take his bonus. Senior staff felt compelled to follow suit.

A source close to the bank said: "Ackermann came out and said he wasn't going to take a bonus last year and forced the hand of the board and others. They simply had no choice but to forgo their bonuses. But bankers live for their bonuses and are furious at the handling of all this."

Mr Ackermann is due to retire from Deutsche Bank in May 2010 and is already thought to have lined up a senior role at a bank in his native Switzerland.

In 2007 Mr Ackermann received a bonus of €€12.7m. Last year he took home a salary of around€€1.4m.

Some of Deutsche's leading executives who have missed out on bonuses are already thought to be mulling competing offers from rivals.

Just last month, Deutsche expanded its management board to include the heads of some of its operating businesses, including London-based Anshu Jain and Michael Cohrs, who jointly head up investment banking.

Mr Jain, who sits on the Government's panel reviewing the City of London's competitiveness, has long been one of Deutsche Bank's star performers and has been tipped as a possible successor to Mr Ackermann, although a source close to Deutsche's board said it is unlikely Mr Jain would get the top job.

After better than expected results from Goldman Sachs and Credit Suisse earlier this month, analysts are expecting that Deutsche also enjoyed a strong start to the year.

But a note from Citigroup last week said: "We worry that underlying client activity levels remain subdued in many areas of the business, and some of the first quarter positives may prove temporary." Some analysts have predicted that Deutsche Bank may have to raise capital to bolster its capital ratio.

Credit Suisse, which avoided having to be bailed out by the Swiss government last year, posted a profit of around SFr2bn (£1.2bn) last week compared to a loss of roughly the same amount in the first quarter last year. In contrast Credit's domestic rival, UBS, said earlier in the month that it expected to post losses of around SFr2bn during the first three months of the year.

Barclays' chairman, Marcus Agius, survived the biggest revolt against any FTSE 100 chairman seeking re-election since 2004 on Thursday after more than 16 per cent of shareholders voted against his reappointment.