It appears that a CEO of a major, global bank is suggesting that for the second consecutive year executive managers do not exactly deserve a bonus. By contrast, the CEO is indicating that the rank and file employees should get one this year.
John Cryan, the CEO of Deutshe Bank, made these declarations last week during a Zeit Online event that took place during the South by Southwest (SXSW) set of conferences and festivals, held annually in Austin, Texas. (SXSW, which ends today, incorporates film, interactive media, and music festivals and conferences.)
Cryan participated in a panel discussion at SXSW and clarified that the German banking giant’s management board of 12 did not achieve all of its goals in 2017, and would not be getting a bonus this year.
In addition, the CEO, who is British, acknowledged that some of the bank’s big shareholders have a right to ask why things haven’t gotten better by now for Deutsche Bank. “I myself am one of these critics and I am extremely impatient. But it also takes time to turn an oil tanker around,” Cryan is reported to have said via the Zeit Online report from its SXSW panel discussion.
Yet “variable compensation for staff” is moving ahead, and will be better than past years, but not as generous as the bonuses for 2015, Cryan says, according to Zeit Online. “The variable compensation won’t be as high as it was in 2015, but it will be significantly higher than in 2016,” the CEO said.
A spokesperson for Deutsche Bank declined to comment further on Cryan’s remarks, and did not deny that he made the remarks.
So, if what was reported is true, then this is a significant step forward on many levels.
First, we have a CEO of major institution plainly stating that if the executives with the power have not met or exceeded goals, there is a penalty. While other firms have infrequently done something similar, this might help set a standard across the industry, and serve as a major point of reference for angry shareholders.
During the Great Recession, (a time that many people have been trying to forget), bank executives were still getting bonuses as their firms were reporting record-breaking losses or being sold off at bargain rates. People outside of Wall Street were shocked that bonuses were even considered for those at the top while pink slips were being sent out for lower level staff — the innocent victims of bad executive decisions.
On another level, I hope that Cryan and Deutsche Bank are helping to create a precedent.
Despite Deutsche Bank’s past controversies and those that may be pending (Trump and Russia, for one), it would be a welcome change if executives were held more accountable and only given bonuses for outstanding performance.
It’s how the other half lives.
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