Deutsche Bank chief executive Christian Sewing and his management team are forgoing a tiny fraction of their 2021 bonuses, in a rare move meant to show that management is partly responsible for the use of messaging apps unapproved at Germany’s largest bank.
The ten members of Deutsche’s management board have each offered to waive €75,000 in variable compensation and the bank’s supervisory board has agreed, according to four people familiar with the matter.
Deutsche Bank is among several financial institutions under investigation by US regulators over employee use of personal messaging apps, including WhatsApp.
The practice, which can evade the detailed record keeping that regulators require of banks, exploded during the pandemic when face-to-face meetings were often impossible.
The voluntary decision by Deutsche Bank executives was first discussed after JPMorgan Chase agreed in December to pay US authorities $200 million for failing to record staff communications on personal devices. The fines were seen as a wake-up call to banks to tighten controls and document retention.
The FT reported this month that Credit Suisse had fired a prominent investment banker after it was discovered he had been using unapproved messaging apps with clients. HSBC, meanwhile, fired a forex trader after an internal investigation found he misused a messaging app to communicate with a broker.
However, the costs that Sewing and the upper echelons of the bank have offered to bear are far less. The €75,000 the Deutsche Bank chief is giving up is 1.4% of the €5.2m bonus, which was part of a total compensation package of €8.8m.
Of the executives, Rebecca Short, the bank’s chief transformation officer, is the hardest hit by giving up 3% of her bonus.
The executive board’s decision is not related to the misuse of messaging apps by individuals, according to a person familiar with the matter, but is intended to send a “signal” to the supervisory board.
Deutsche Bank declined to comment.