Deutsche Bank chief executive Christian Sewing is backing his plan to turn round the lender’s ailing share price by committing to spend 15 per cent of his net salary on its stock.
It is the first time a Deutsche chief has made a commitment to regularly invest a chunk of their salary into shares of Germany’s biggest bank. Mr Sewing, who has worked for the bank almost all his career having joined as an apprentice, was paid just over €7m last year, including a base salary of €3.3m.
The pledge from Mr Sewing comes a couple of months after he announced a drastic restructuring of the bank, including cutting 15,000 to 20,000 jobs and shedding large chunks of its investment banking operation.
Mr Sewing will buy a chunk of shares equal to 15 per cent of his net salary until the end of 2022, according to a filing from the German lender on Monday. This would add up to a total investment of €850,000 in the period, according to a spokesperson for the bank. Mr Sewing has already spent €44,058 on buying 6,563 shares in July and August.
The announcement follows a similar move by Paul Achleitner, Deutsche’s chairman, who invested €1m in the bank’s shares at the start of last month.
Deutsche shares, which have risen slightly since hitting a record low in the middle of last month, were up modestly on Monday. However, they are still down a third in the past year and have fallen more than 80 per cent in the past decade, making them one of the worst performers in the banking sector.
Mr Sewing owned 73,237 shares in the bank on February 15, according to Deutsche’s annual report, and his planned monthly purchases would increase his shareholding by more than three-quarters at the current stock price.
That would still remain far below many of his rivals at US banks. On average, the bosses of the top five US global banks owned $222m of stock as at the end of last year, more than 15 times the average of the top half-dozen global banks in Europe, according to data from Equilar, the executive pay specialists.
When he first disclosed plans to invest more of his money in shares in July, Mr Sewing said: “I’m personally putting my money where my mouth is. I want to lead by example.”
The restructuring Mr Sewing unveiled at the start of July signalled that Deutsche is abandoning its long-running attempt to break into the top tier of global investment banking and returns the group to its roots as a bank for large companies in Germany and beyond.
However, with the German economy on the brink of a recession and the European Central Bank poised to put more pressure on banks’ lending margins by cutting interest rates again next month, Mr Sewing still has his work cut out to turn the group round.