April 10 (Bloomberg) -- Raiffeisen Bank International AG’s chief executive officer repaid 2 million euros ($2.6 million) to his company after saying he noticed that the lender’s annual report would show his compensation swelled last year while he cut jobs and profit fell.
Herbert Stepic told journalists in Vienna today that he decided to redeem part of his share-based bonus out of “solidarity” and respect for his employees amid job reductions. He said he didn’t notice the share allocation until he saw it disclosed in a draft copy of Raiffeisen’s annual report he was proofreading ahead of publication today.
“The moment I saw the first draft of the annual report, I realized that there is a significant number on display for me personally,” Stepic said. After discussions with Chairman Walter Rothensteiner, “we agreed that I make a repayment of 2 million euros,” he added.
Raiffeisen’s annual report details individual board members’ salaries for the first time this year. The company previously disclosed only a sum for the entire management board. Stepic received 1.61 million euros in fixed salary in 2012, along with 611,000 in bonuses for 2011 and 448,000 in “other” remuneration.
Stepic also took possession of 86,217 Raiffeisen shares in April 2012, part of a long-running share incentive program. The value of the shares was 2.26 million euros at the time of the award, according to the annual report. Stepic kept the shares and repaid the 2 million euros in cash, company spokesman Michael Palzer said.
Raiffeisen has cut more than 1,000 jobs in both Hungary and Romania since 2008, and is moving jobs to lower-cost locations in several countries. The bank received 1.75 billion euros in state capital in 2009 and hasn’t announced a date to pay back the funding. Profit dropped by 25 percent last year as loan losses soared and the value of an acquisition in Ukraine was written down.
ING Groep NV CEO Jan Hommen waived a 1.25 million-euro bonus and a 2 percent pay rise in 2011 after a remuneration plan sparked outrage among consumers and politicians and accelerated new legislation for financial-services companies receiving aid from the state.
To contact the reporter on this story: Boris Groendahl in Vienna at firstname.lastname@example.org
To contact the editor responsible for this story: Frank Connelly at email@example.com