Deutsche Bank rejects pressure to sweeten retention bonuses

Bloomberg

Deutsche Bank AG is rebuffing pressure from top performers to restructure retention bonuses after the awards tumbled in value last year and opened the way for more defections, according to people familiar with the matter.
The bank told key staff in recent weeks it won’t make any changes to the program, which began in 2017, the people said, asking not to be identified because the talks were private. Senior executives including Mark Fedorcik, co-president of the investment bank, have sought to retool the bonuses after the share price slid far below the level needed for full payout, the people said. Some employees have been weighing career options, worried a potential merger with Commerzbank AG might crimp their future compensation.
To ensure crucial talent didn’t flee, the firm earmarked more than 1.1 billion euros ($1.3 billion) in retention awards to about 5,500 employees in 2017. But the payouts take as long as six years to vest, and half are in the form of equity that will be withheld if the stock misses an undisclosed target. The stock slumped 56 percent last year, leaving the price below half the level needed, people familiar with the matter have said.
Deutsche Bank has said it set a minimum stock price when designing the bonuses “to further align the awards with the long-term health of our bank and the interests of our shareholders.” Yet the price is now so much lower than what’s required, that some employees are giving up.
A representative for the company declined to comment. Departures from the investment bank in the past year included Charles Dupree, the top mergers and acquisitions banker in the Americas, and Tadhg Flood, co-head of financial institutions banking. Brad Kurtzman, head of the equities unit in the Americas, will depart at the end of March, according to a recent memo to staff.
The company has told employees of deep cuts to 2018 bonuses, people familiar with matter said last week.