In light of upcoming legal battles and prior and potential settlements over misconduct, Deutsche Bank has opted to pursue a multi-thronged settlement with several ex-executives, looking to reconcile unpaid bonuses. The lender will look to close the door on past bonuses owed to upwards of ten former managers at Deutsche Bank, who in return would forgo any legal measures against the individuals, making them immune to any damage claims or recourse.
Deutsche Bank had previously suspended bonuses to ten of its former management board members, a list that includes Juergen Fitschen, Anshu Jain, Stefan Krause, Stephan Leithner, Rainer Neske, Henry Ritchotte, and Stuart Lewis, among others.
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More specifically, Deutsche Bank’s Chairman Paul Achleitner is pursuing a proposal that would see the ex-executives forfeit their remaining bonuses owed – which are now being held – in return, these executives would be essentially off the hook for any damage claims and guilt via past transgressions and misconduct while employed at the bank, according to a recent Bloomberg report.
Best Offer on the Table?
Deutsche Bank had already been reviewing for some time whether it was possible to hold former management board members liable across a string of debilitating regulatory probes. Forgone bonuses will also free up needed cash to help fund its massive restructuring plan, while also helping offset its recent settlements. Deutsche Bank had also recently issued an €8.0 billion ($9.0 billion) cash call just two months ago, which was the bank’s fourth in seven years.
Tapping former executives for bonuses however speaks more to the lingering effects of Deutsche Bank’s fines, which have crept higher in recent years, exceeding $10.0 billion after successive settlements with the US Department of Justice (DoJ) and regulatory authorities. However, Mr. Achleitner’s plan has been met with some resistance from ex-executives given the varying size of bonuses owed. Deutsche Bank for its part is pursuing a simultaneous settlement with all ten executives, though there is some disagreement over the total amount of bonuses the overall group will reconcile as well as each individual’s share.
Bonuses have already been one of the more contentious issues at Deutsche Bank in 2017, having been the subject of sweeping cuts. As recently as March, the bank issued a plan to cut its group bonus pool by a staggering 50 percent, adding a new layer to the already mitigated bonus pool from earlier this year.