News: Deutsche Bank CEO’s 46% pay rise prompts backlash.
FRANKFURT (Reuters) – Deutsche Bank paid CEO Christian Sewing € 7.4 million ($ 8.8 million) in 2020, an increase of 46 percent over the previous year, which led to criticism from unions and politicians.
The bank’s bonus pool increased 29% as employees were rewarded for a pandemic-induced trade boom that helped the German lender make a profit after years of losses.
The announcement in the bank’s annual report came on Friday when the German said revenue would be “slightly lower” this year.
In Germany, an election year ahead of the public, the Verdi union described the payments as “grossly disproportionate” and politicians were critical.
“It does not fit the time when Deutsche Bank, which has also benefited indirectly from bailouts, has a coronavirus party,” said Fabio De Masi, a member of the German parliament, in a statement to Reuters.
Last year was a turning point for the German and sewing business, which took office in 2018 after the bank faced a number of costly regulatory deficiencies, including money laundering.
The bank has lost 8.2 billion euros in the past decade.
The net profit attributable to shareholders in 2020 was 113 million euros after a loss of 5.7 billion euros in the previous year, as an increase in income in investment banking compensated for the weakness of other business areas.
“In 2020 we made great strides in transforming it into a sustainably profitable bank and were even more relevant to our customers,” Sewing said in a statement.
In solidarity with those suffering from the effects of the coronavirus crisis, the bank’s management board waived part of their remuneration.
The increase in the so-called bonus pool for the entire bank to 1.9 billion euros brings it to around the level of 2018.
The German gave out bonuses when the employees of the bank’s call center went on strike over the demand for higher wages. Some of these workers earn just € 12 an hour, according to union officials.
Jan Duschck, who oversees the banking industry at the Verdi union, said it’s not like top earners get big gains while those at the bottom of the pay scale get next to nothing.
“Such a remuneration policy creates an extremely bad image for the bank and should be urgently corrected,” Duschck said in a statement to Reuters.
With the Sewing package, he is one of the higher-paid European bank chiefs this year for those who have previously published salary packages.
At Barclays, CEO Jes Staley received £ 4 million ($ 5.57 million) from £ 5.9 million the previous year.
Executives at several other banks have also agreed to waive payment to show support for those affected by the pandemic.
Ana Botin, Executive Chairman of Santander, and Jose Antonio Alvarez, Chief Executive, have reduced their total compensation for 2020 by 50%. The outgoing UniCredit CEO Jean-Pierre Mustier gave up his variable compensation for 2020 and cut the remainder of his salary by a quarter.
Reporting by Tom Sims and Patricia Uhlig; additional coverage from Rachel Armstrong; Editing by Edmund Blair, Jason Neely and Jane Merriman
Original Source © Reuters