(Reuters) - Deutsche Bank is freezing 2015 cash bonuses for its executive board as it examines whether some managers could have done a better job at avoiding problems that led to expensive litigation, a person familiar with the matter said.
The bonus freeze hits all members of the management board except Deutsche Bank’s new Chief Executive John Cryan, new Chief Financial Officer Marcus Schenck and new retail bank head Christian Sewing, the person said.
“Deutsche Bank wants to investigate the incidents in detail and will in the meantime put cash bonuses on ice,” the person said, adding that the move would also hit former top managers, who would be entitled to 2015 cash bonuses.
Deutsche Bank had no immediate comment.
Combined with a similar freeze in 2014, a total of 16 million euros ($17.7 million) would be held back, the source said.
Cryan criticised staff in a memo on Thursday, saying performance was “nowhere good enough” after Germany’s largest bank said its turnaround was at risk from heavy legal charges.
The bank has set aside a fresh 1.2 billion euros ($1.3 billion) for fines and settlements as of June 30 and said it might not reach its 2020 performance targets.
According to the person familiar with the bank, Deutsche Bank pays its in-house lawyers 150 million euros a year to work on the swathe of cases, and spends another 350 million euros on external legal advice.
Germany’s financial watchdog has found several of Deutsche Bank’s senior managers failed to investigate the wrongdoings of bank staff. Deutsche Bank has disputed the allegations.