Deutsche Bank Cuts Pay As Workers See Fewer Exits
Deutsche Bank AG co-Chief Executive Officer Anshu Jain is cutting compensation to placate shareholders as Europe’s debt crisis slashes financial-industry jobs, leaving workers fewer opportunities to defect, Bloomberg reported. “We need to further address both the absolute level of compensation and the relative balance between rewards for shareholders and those for employees,” Jain said yesterday on a conference call. “Compensation must be clearly and visibly aligned to sustainable performance.” Investment banks are trimming their workforce to reduce costs as the debt crisis curbs trading and leads to a slump in stock and bond offerings. The dearth of jobs in the sector will make it easier for Jain, 49, to get employees at Germany’s biggest bank to accept lower pay for lack of alternatives, said Dirk Becker, a Kepler Capital Markets analyst in Frankfurt. “A few years ago, no one in the investment-banking industry would dare cut compensation as they’d lose their talent,” said Becker, who recommends investors buy Deutsche Bank shares. “Now, many of the banks are cutting pay and that’s good for shareholders.” Deutsche Bank advanced 0.1 percent to close yesterday at 24.88 euros in Frankfurt. The stock has fallen 15 percent this year, compared with a 0.8 percent decline for the 38-company Bloomberg Europe Banks and Financial Services Index. The lender said yesterday that it will will cut about 1,900 jobs by the end of the year, including 1,500 positions in its investment bank and related infrastructure areas. Most of the reduction will take place outside of Germany, the firm said. Read more.