In an effort to counter revenue slump, Frankfurt-based
Deutsche Bank AG
) is contemplating on trimming roughly 20% of bonuses in the
bank's investment banking division in Europe for 2012. Though the
plans are in the primary stage, the company is anticipated to
declare its final decision by the end of this month.
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The reduction in bonuses may take place in the range of 10%-20%
on an average in Europe, Middle East and Africa. However,
locations that achieved healthy results will have much lower
Earlier in September 2012, the bank altered the compensation
practices of the top management. The new policies included the
chief executives of the company having their bonuses paid after
five years, instead of the previous practice of part-payment over
a span of three years.
Notably, in the same month, Deutsche Bank announced its
restructuring plans, which followed a 100-day evaluation made by
the new co-CEOs - Juergen Fitschen and Anshu Jain. Deutsche
Bank's revamp plan involves change in compensation practices, job
cuts as well as assets sales. The company intends to bring down
annual costs by €4.5 billion ($5.8 billion) by 2015 and slash
more than 1900 jobs, mainly in the investment banking division.
Hurt by the Eurozone debt crisis, Deutsche Bank experienced
trading revenue declines in the past. Further, stringent
regulatory guidelines along with the weak euro have compounded
the woes. The company has adopted several strategic initiatives
such as repositioning its core business and bolstering its
capital levels along with expense management to counter these
) is also anticipated to slash bonuses for investment bankers for
2012 by roughly 20%. The company is taking this step in an effort
to strengthen its profit levels. The bonus details are
anticipated to be announced early February this year.
Deutsche Bank currently retains a Zacks Rank #4 (Sell).