- Spencer Platt/Getty Images
Deutsche Bank, the troubled European bank, is doing away with 2016 bonuses for senior employees.
A source at Deutsche Bank said that the cuts will be for individual bonuses at the vice president level and above, but that some smaller group bonuses would remain.
A memo sent to staff said that the decision was made in part due to large legal fees as well as the bank’s performance.
“Now we have a clearer idea of the financial impact of the settlement with the DoJ and our performance for the year, we feel these measures, are unavoidable,” said the memo.
The memo says the decision has been taken at management board level and has not been “taken lightly” and all executives on Deutsche Bank’s management board have decided to waive their “variable compensation” – bankspeak for bonuses – for 2016.
However, the memo says that “a limited number of employees in crucial positions for the further success of the bank will be granted a special long-term incentive, partly in the form of shares, which will be deferred up to six years.”
In addition, the memo says the while the bank “made significant progress resolving legacy matters and restructuring our bank… there is still some way to go.” As a result, Deutsche Bank says “we will have to take some tough decisions that will demand a great deal of us.”
2016 was a tough year for the bank. The Department of Justice announced on Tuesday that it settled with the bank for $7.2 billiondue to violations regarding financial crisis-era residential mortgage-backed securities. That was less than the original $14 billion settlement the DOJ was seeking in September that sent the bank’s stock spiraling and led to questions of a bailout from the German government.
The decision to roll back bonuses was made at the end of 2016, according to Bloomberg, and will not impact junior employees who are already on fixed salaries.