After Slashing Bonuses, Deutsche Bank Delays Promised Pay Raises
Look on the bright side: At least you still have a job.
After an almost unrelentingly demoralizing 2019, Deutsche Bank’s CEO is asking his bankers to make one last sacrifice for the sake of Sewing’s grand turnaround vision to keep this melting icecube intact just a little while longer.
What’s he doing, exactly? Well, waiting few extra months for pay raises promised last year.
But hopefully employees don’t read too much into the delay: because of the pay raises taking effect on Jan. 1, bankers will need to wait until April Fool’s Day instead, according to Reuters and the New York Post.
“After thorough discussions, we on the Management Board have taken the decision that, from 2020, any fixed pay adjustments in connection with the annual review or promotion process will be effective April 1 (not retroactively effective as of January 1).”
Unsurprisingly, Sewing blamed the many scandals and penalties that have plagued Deutsche Bank, saying they’ve hastened the need for dramatic cost cuts. For context: The bank has paid out more than $20 billion in fines over the last decade.
“We carefully assessed how this decision would impact our employees and benchmarked ourselves against peers,” Sewing said in a memo obtained by the New York Post.
Sewing stressed that for the bank to become more competitive and avoid even more painful cutbacks, it must be run in a “disciplined manner”. Perhaps he should tell that to his predecessors who allowed the global headcount at the German giant to swell to nearly 90,000.
“For the bank to be competitive and meet its goals for sustainable returns to shareholders it is vital that we further manage costs in a disciplined manner,” Sewing wrote. “This also relates to compensation.”
Deutsche Bank isn’t the only European bank embracing “cost cuts” in its investment-banking unit (though DB bankers will also have to do more with less this year), and Sewing assures his staff that DB’s efforts have been “benchmarked against peers”.
“We carefully assessed how this decision would impact our employees and benchmarked ourselves against peers,” Sewing added.
Anybody complaining about the delay should take a second to think about what they have to be thankful for: At least they still have jobs, and will continue to be paid.
“We will continue to compensate employees for their qualifications, experience and skills, commensurate with the requirements, size and scope of their role,” Deutsche Bank said.
Many of their now-former colleagues aren’t so lucky.