Deutsche Bank may cut the bonus pool for its investment bank by as much as $566m, or almost a third, as co-CEO John Cryan seeks to slash costs in the securities unit, according to people with knowledge of the matter.
Bloomberg News reports that no decision has been taken and the biggest reductions are likely to impact employees in the fixed-income business, said one of the people, who asked not to be named as the information isn’t public.
Some Managing Directors may have their entire bonus scrapped, according to the person. Deutsche Bank paid staff at the securities unit $1.83bn of variable compensation for 2014, the firm’s filings show.
Cryan, 54, who took over from Anshu Jain in July, indicated earlier this month that bonuses may be cut after saying the company will report a third-quarter loss of about $6.66bn after writing down the value of the investment bank and other assets.
Anne Richards, chief investment officer at Aberdeen Asset Management said in an interview on Bloomberg Television earlier this month: 'This (cutting the bonus pool) puts them in a really competitive bind, because the Morgan Stanleys, the Goldman Sachses, they’ll be picking up the phone and dialing those bankers today, the ones that they know can bring in the deals. It puts them in a very difficult competitive situation'.