Deutsche Bank plans salary hikes by up to 30%

Deutsche Bank AG, Germany’s largest bank, may raise salaries for employees by as much as 30 per cent to increase the proportion of fixed pay to bonuses in overall compensation, a person with knowledge of the matter said.

Majority of the bank’s global workforce, of more than 78,000, will probably get significantly lower increases, sources said, declining to be identified because the official announcement will come in February. Changes in compensation are planned to be effective retro-actively from January 1, he added.

The Frankfurt-based bank is responding to regulatory demands and shifting pay practices to emphasise base salaries rather than bonuses, spokesman Christoph Blumenthal said on Monday. Deutsche Bank was among some German banks that promised last month to impose self-discipline on pay in response to recommendations by the Basel, the Switzerland-based Financial Stability Board.

 

“If you keep changing the rules, banks will keep changing the way they pay people,” said Simon Maughan, an analyst at MF Global Securities in London who rates Deutsche Bank “buy.”

Credit Suisse Group AG, Switzerland’s biggest bank by market value, said in October it would raise salaries for about 7,000 senior employees as a percentage of total pay on January 1, and introduce two deferred equity- and cash-based awards whose value will vary based on the company’s earnings.