Commerzbank and the 'Outrageous' Bonus Decision

No Pot Of Gold

Now you have it, now you don't.

Bloomberg reports that Matthew Jordan, like many Dresdner Kleinwort bankers, was worried about Commerzbank’s plans to take over the investment bank in 2008.

Jordan, Dresdner’s deputy head of equity research, had lost 20 analysts to rivals that year amid uncertainty about the lender’s future.

So he was relieved when Dresdner Kleinwort’s then-CEO Stefan Jentzsch used a December town hall meeting to ease concerns about a bonus pot set aside that summer to retain staff. Commerzbank executives were 'men of honor who will stick to the bonus commitments' Jentzsch said, according to trial documents.

Less than three months later Commerzbank proposed cutting awards by as much as 90% because of worse-than-expected losses. 'Everyone was outraged', Jordan, 41, said in a phone interview. 'From the moment I heard, I spent the next 24 hours rushing around London meeting different law firms'.

Commerzbank last week ended four years of fighting Jordan and more than 100 other Dresdner bankers. It decided not to appeal two London court rulings awarding the bankers about $65.7m.

While the Frankfurt-based lender maintains its conduct was proper, Commerzbank didn’t want to waste money continuing to fight the case, Margarita Thiel, a spokeswoman for the lender, said in an e-mail. The bank consistently argued that a 6.5 billion-euro loss at Dresdner during 2008 justified cutting compensation.

Hit the link below to access the complete Bloomberg article:

Dresdner Bankers Celebrate Bonus Win Commerzbank Wants to Forget

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