Voluntary Pay Cut No Bonus for Deutsche Bank Boss Ackermann
The German Social Democrats have never been shy of a little populism. In 2002, it was then-Chancellor Gerhard Schröder who made his opposition to the impending US invasion of Iraq a major plank in his re-election campaign. SPD head Franz Müntefering followed in 2005 with his oft-repeated labelling of private-equity investors as "locusts" on German businesses.
Finance Minister Peer Steinbrück's insertion of a clause in Germany's €500 billion bank bailout bill calling for managers from those banks in need of public help to accept a reduced salary of just €500,000 per year fits right in.
But now, it seems that Steinbrück has been one-upped in the populism department -- by none other than Deutsche Bank CEO Josef Ackermann. On Thursday Ackermann told the German tabloid Bild that he would forgo his annual bonus this year out of solidarity with Deutsche Bank employees lower down on the ladder.
"I have told the supervisory board that in this difficult year I will waive my bonus -- for the good of deserving workers who need the money more than I do," Ackermann told the paper. In 2007, the Deutsche Bank head earned over €12 million worth of bonuses. It is unclear how high Ackermann's bonus would have been this year, but he said it was "a few million."
Deutsche Bank says it has lost in the neighborhood of $10 billion as a result of the credit crisis since the beginning of 2007.
At a Thursday management meeting in Frankfurt, Ackermann also said Deutsche Bank would not take advantage of help offered by the €500 billion German bailout package that passed through both houses of German parliament on Friday.
The SPD on Friday seemed unhappy with Ackermann's attempt to portray himself as a man of the people. SPD parliamentary floor leader Peter Struck called Ackermann's offer "pure showmanship." Struck made his comments just before Germany's lower house of parliament, the Bundestag, voted to approve the gigantic bailout package. He went on to say "the arrogance of the bankers has to come to an end once and for all. These gentlemen acted as if they were playing a giant game of Monopoly."
Despite the widespread disgust with the financial calamity brought on by dubious investments and high-risk trading, it seems doubtful that Finance Minister Steinbrück's plan to require bank managers receiving state help to accept a salary of no more than €500,000 per year will gain traction. Frankfurt law professor Theodor Baums told SPIEGEL ONLINE that "no one can require a manager with a valid contract to reduce his salary to €500,000 per year."
But then, when it comes to populism, real-world effects are perhaps secondary. Ackermann, for his part, certainly won't go hungry as a result of his offer. His base salary in 2007 was €1.2 million.
cgh -- with wire reports