Bank Ex-Board Members Asked To Pay For Misconduct

By on June 18, 2017 in ArticlesHow Much Does

In a series of private talks, Paul Achleitner, Chairman of Deutsche Bank AG, has offered a number of former board members a unique deal. The company will pay out the unvested portion of their bonuses, but only if they give up claims to payments that were previously withheld by the lender.

Many of the ex-board members have some grievances. There are disagreements over the total number of bonuses that will be forfeited and each individual's share. Achleitner hopes the former executives will help pay for fines the lender suffered due to their past misconduct. The Frankfurt-based lender is also seeking a simultaneous agreement with the former board members. The bank said in a 2015 report that it had decided to suspend bonuses for ten former management board members and one incumbent.

The proposal would see them forgoing bonuses the bank still technically owes them but has suspended. In return, they would not admit to guilt and the bank would lose the ability to file for damages. A large chunk of the bonuses will vest in August, which gives the former executives incentive to reach an agreement before then.

BORIS ROESSLER/AFP/Getty Images

According to Achleitner, the bank is currently withholding bonuses worth 7.27 million euros ( $8.14 million in USD) and 161,029 share awards from former co-CEO Anshu Jain, as well as 4.74 million euros and 124,160 in share awards from ex-CEO Josef Ackermann.

The current management criticizes the former team for putting short-term earnings ahead of long-term interests.  The lender posted two years of losses, partially due to misconduct fines, and recently completed a $7.2 billion settlement with the United States over how it handled mortgage-backed securities before the housing crash in 2008.

During Jain and Fitschen's tenure, the lender was probed for tax evasion, raided by the police, and ordered to pay $2.5 billion for its role in rigging benchmark interest rates.

 

Articles Written by Daniel Lipson
Daniel Lipson loves writing and working at the junction of art and technology. His education includes degrees in Creative Writing & Arts at Carnegie Mellon, and in Mass Communications & Journalism at San Jose State. His main interests are books, movies, television, games, and music that are inspiring and thought-provoking.
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