Deutsche Bank is considering reducing bonuses for investment bankers in Europe by as much as 20% on average for 2012, while bankers in New York will see smaller declines, said four people briefed on the matter.
Bloomberg reports that the cuts may range between 10% and 20% on average in Europe, the Middle East and Africa, while bonuses in locations that performed better or where competition for staff is stronger will fall less, said the people, who asked to remain anonymous because the matter is private. The plans are preliminary and may change, they said.
Deutsche Bank is reducing pay and overhauling compensation for its senior executives to help boost profitability as some regulators demand rewards be tied more closely to company performance. Co-CEO Anshu Jain, 50, has said that he sees a risk the bank may lose talented employees if competitors don’t follow suit.
'The bank’s earnings fell last year, so it makes sense for bonuses to decline', said Philipp Haessler, an analyst at Equinet AG who recommends investors buy the shares. 'The interesting question will be whether Deutsche Bank can lower its compensation ratio in good years as well'.
The company will finish setting bonus levels and relay its decision to some employees as early as this month, the people said. The bank may also cap the immediate cash portion of bonuses for 2012 as it did the previous year, said one person familiar with the discussions.
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