While the Euro crisis and the tumbling investment banking market are primarily to blame for Deutsche Bank's recent financial woes, gaudy compensation packages for directors and i-bankers aren't doing the firm any good either, at least according to one influential board member.
Werner Wenning, a supervisory board member at the German bank, believes the firm needs to institute a firm cap on corporate bonuses as part of the Deutsche Bank's new pay reform policy - a move that co-chief Anshu Jain feels isn't prudent at this time, according to the Financial Times. Jain has said that Deutsche Bank will cut bonuses and create an independent panel to review its pay structure but has been reluctant to consider a firm cap on compensation.
"No manager, also no investment banker, needs to earn an amount in the double-digit millions," Wenning told the Frankfurter Allgemeine newspaper over the weekend.
Wenning's comments come just days after Deutsche Bank announced plans to dramatically scale back its European business. Reports have surfaced that the bank plans to cut an unknown number of senior-level jobs in its investment banking business in Dubai as well as several UK-focused bankers from its advisory business, according to eFinancial News.
The moves would represent the latest in a flurry of activity for the German bank, which is in the midst of a major facelift under new co-chiefs Jain and Jürgen Fitschen. Deutsche Bank last week said that it was over-invested in Europe, and detailed plans to cut nearly 2,000 jobs, sell off various assets and pare down its relationships with vendors with the goal of saving nearly $6 billion per year through 2015.
Sources close to the situation told Reuters that the workforce reductions would be "over and above" the 1,900 positions already announced. In Dubai, at least seven people are being let go, including as many as four at the director level. Many previous i-banking cuts have been at the junior level.