SPIEGEL Interview with Deutsche Bank CEO Josef Ackermann 'We're not Barbarians'

Deutsche Bank CEO Josef Ackermann speaks to SPIEGEL about the public's growing mistrust of the business community, Germany's massive tax evasion scandal in Liechtenstein, executive fat cat salaries and the causes and consequences of the current financial crisis.


SPIEGEL: Mr. Ackermann, acceptance of the market economy and trust in its representatives, bankers and business executives, is waning. Is capitalism in crisis?

Josef Ackermann: I don't think so. But there are many problems that are blamed on capitalism and the market economy in this country. That's why it is experiencing a crisis of confidence in Germany at the moment. However, this is by no means the case worldwide. We, the representatives of the German economy, are apparently not doing a good enough job of explaining the background in a way that is understandable for citizens and inspires the necessary confidence.

SPIEGEL: How do you propose to explain to people why their lives are becoming more and more uncertain while life is only getting better for a small class of people?

Ackermann: It isn't the case that people's lives are becoming increasingly uncertain. Germany clearly benefits from globalization. Unemployment has declined significantly in recent years. And in China and India, globalization has enabled billions of people to escape extreme poverty.

SPIEGEL: Incomes are stagnating for many people. Nowadays you and other CEOs of companies listed on the DAX earn many times more than was customary and generally accepted only 10 or 20 years ago. Is that fair?

Ackermann: Unfortunately, the way we discuss fairness in Germany is completely wrong. Helping the poor and the weak is an imperative of human compassion. Fairness, however, is primarily equal opportunity and equitable treatment when it comes to performance, not general equality. But here in Germany we always just look at distribution. The problem is that you have to produce something before you can distribute it. And to ensure that as much as possible is produced, that is, the pie to be distributed is as large as possible, performance must be worth its while -- more specifically, after taxes. Income distribution starts to look different when you take taxation and government subsidies into account. Here in Germany, the top 10 percent of wage earners pay more than half of all income taxes. People like to ignore this.

SPIEGEL: Not everyone pays their taxes. Take, for example, the tax evasion scandal, including the investigation into former Deutsche Post CEO Klaus Zumwinkel. There are companies that are raking in billions and yet, like Nokia, are either outsourcing jobs or, like BMW, Henkel and Siemens, are cutting jobs. And there are executives who, despite poor results, keep earning more money. All of this leads to declining confidence in the economy.

Ackermann: You are highlighting a small number of cases that paint a distorted picture of the economy. If this is the prevailing image, it is not surprising that public confidence is diminishing. I could name many more cases that paint a completely different picture. For example, more people are being hired than let go in Germany. In February there was yet another significant decline in seasonally adjusted unemployment figures. New jobs are the best program for achieving more fairness. The overwhelming majority of German business owners and executives, together with their employees, have done outstanding work in recent years. Our successful companies are the envy of the rest of the world. We should be proud of them instead of systematically denigrating their executives.

SPIEGEL: And what about the tax scandal?

Ackermann: Obviously tax evasion is unacceptable. But we should not generalize individual misconduct and flatly blame our market economy system. We must differentiate, look at the whole picture and turn our attention to the central questions facing the country in the future. Instead, we become upset, with embarrassing regularity, over things that I don't want to downplay, but that have to be seen in the context of truly existential issues.

SPIEGEL: Do we understand you correctly? Are you saying that everything is just fine, but that our perceptions happen to be off?

Ackermann: I didn't say that everything is just fine. However, I have noticed a political slant. Who, in politics, actually champions those -- from blue-collar workers to senior executives -- who spend their working days producing all the things that we ultimately need to live? Think about what it was like five to seven years ago. Many German companies had come upon hard times, and some -- including banks -- were struggling to survive. Today many German companies are global leaders once again…

SPIEGEL: … which no one disputes …

Ackermann: … but which apparently hardly anyone taking part in the public debate truly acknowledges. Our reputation out there in the world, especially in the booming regions of Asia and the Middle East, is better than ever. But instead of seizing this opportunity for Germany, we tear ourselves apart and constantly point out the negatives. And then there are the poets and philosophers who, despite their own dubious histories, in some cases, fancy themselves as moral apostles and denounce executives across the board as "anti-social."

Major Bank Write-Offs in 2007
DER SPIEGEL

Major Bank Write-Offs in 2007

SPIEGEL: Are you referring to (German author) Günter Grass?

Ackermann: I prefer not to mention any names. But such statements are downright offensive. And it's astonishing that no one stands up and says: What gives this man the right to pass such judgment over other people, people he doesn't even know? We cannot take this lying down. In fact, we defend ourselves against such statements both vehemently and courageously. We cannot give in to these kinds of people. Instead, we have to highlight our achievements within the economy, partly and even specifically in the interest of our employees and the entire country. If we don't do this, we shouldn't be surprised if the shift to the left becomes stronger and people begin to believe those who would claim that an "unbridled predatory capitalism" is at work in Germany. That's absurd!

SPIEGEL: Isn't it an inherent part of the system that executives, with their salaries numbering in the millions, set themselves apart from normal life, and that they consider themselves to be above things -- perhaps even above the law?

Ackermann: But those are such clichés! Executives are constantly dealing with reality. We interact with shareholders and analysts, customers, employees and colleagues, politicians and the media. And we also have friends and families, of course. I've noticed on several occasions that some of my daughter's friends were thoroughly disappointed to discover that we didn't live the way they had imagined. I recently saw a photograph of (German Left Party leader) Oskar Lafontaine's mansion. He lives a substantially more opulent life than I do. Is anyone accusing him of having removed himself from normal life?

SPIEGEL: Do you feel misunderstood?

Ackermann: The recipient of information isn't held responsible for it, but the person providing the information is. That's why we executives should not complain and withdraw into our shells. Instead, we must actively address the existential questions facing the country in the future, such as better education, and explain our work more effectively. We, together with our employees, work hard to achieve success in our companies. It's really the same story with owner-managers; there are no fundamental differences in this regard. We can't be divided up here.

SPIEGEL: Isn't that a bit naïve? After all, many executives work primarily to achieve their own profits.

Ackermann: Yet another one of those clichés! I don't begin each year by asking myself: How can I maximize my bonus? On the contrary. Otherwise, we at Deutsche Bank wouldn't set ourselves such ambitious goals as 25-percent returns, when our bonuses are based on achieving those goals! I would earn a bigger bonus if I established less ambitious goals. The fact is, the important thing for us is that we have managed to position the bank as a global leader. That's far more satisfying than money.

SPIEGEL: Why do people who already make a lot of money always want more?

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