Senior bankers won't be getting any bonuses at Deutsche this year

As the German financial house finalises US settlement...

Senior bankers won't be getting any bonuses at Deutsche this year

Tony Webster, Flickr

Deutsche Bank has slashed staff bonuses as it faces up to the $7.2bn bill it owes US authorities as a result of the sale of toxic mortgage securities before the 2008 financial crisis took hold.

As the German institution finalised its settlement – which was almost halved from an original figure of $14bn – chief executive John Cryan said in an internal email on Wednesday:

"Now that we have a clearer idea of the financial impact of the settlement with the US Department of Justice and our performance for the year, we feel that tough measures are unavoidable."

The bonus cuts will affect roughly a quarter of its 100,000-strong workforce, focusing on the top earners.

It's not all bad news for senior bankers, however, as Deutsche looks to ensure it retains staff so that it can benefit from the upturn in investment banking by offering key figures long-term incentives instead, deferred for as long as six years.

They will also be entitled to group bonuses, linked to Deutsche's performance. It announces its fourth quarter results on February 2nd.

The awards within retention packages for employees with the titles of vice president, director and managing director will be cancelled if share prices fail to recover by 30% within the next three to four years.

"We have taken this tough decision because it is the right thing to do," Cryan continued in the note, adding that Deutsche planned to return to its standard compensation programme for this year.