Duncan Mavin is a former Bloomberg Gadfly columnist.

Former Deutsche Bank chief Anshu Jain drove the bank to the edge, but he gets to keep the chauffeur-driven car.

Post-departure freebies for the ex-boss -- including an office and secretarial services -- aren't as rare as they should be in Europe's boardrooms. But the arrangement also shows just how much Jain's successor, John Cryan, is up against in overhauling the bank's compensation structure.

Cryan has been clear on the need for a big shift on banker pay. Here's what he said in November: 

"Many people in the sector still believe they should be paid entrepreneurial wages for turning up to work with a regular salary, a pension and probably a health-care scheme and playing with other people’s money."

Yet on Friday, Deutsche Bank's annual report showed total compensation rose from 10 billion euros ($11.12 billion) in 2014 to 10.5 billion last year. So that's a 5 percent increase in a year when Germany's economy grew by just 2.1 percent. The same year that Deutsche Bank reported a record 6.8 billion-euro loss and its cost-to-income ratio -- a key measure of bank efficiency -- blew out to 115.3 percent.

Pay Days
In 2015, Deutsche Bank paid bonuses of 2.4 billion euros despite a 6.8 billion-euro loss
Source: Company, Bloomberg

The bank blames the salary hike on exchange rates and new hires -- including compliance, legal and audit staff. Total headcount actually went up by 3,000. Bonuses fell 11 percent from the previous year, though that only mirrors the 11 percent fall in the bank's share price during 2015. So far this year it's dropped another 19 percent.

Down Time
Deutsche Bank shares have fallen by more than half in the last five years
Source: Bloomberg

In fairness Cryan, like other bank CEOs in a similar position, has to walk a fine line. Indiscriminate action on pay is risky. Cut too broadly and it's the high-performers who'll quit for jobs elsewhere rather than weaker staff. Here's the bank's reasoning for its modest bonus cut:

"A more significant reduction would have jeopardized the implementation of Strategy 2020 as it would have compromised the Bank’s ability to attract and retain talent. Employees are the key factor in achieving the goals of Strategy 2020. To sustain the momentum built up over the last months it is essential that employees are rewarded adequately."

That's more or less the same "death spiral" argument ex-Barclays CEO Antony Jenkins used to justify high bonuses too. Lose too many good people and you guarantee continued decline.

Cryan is trying to take action on salary and bonuses that should pay off in the longer term. The bank has implemented a "New Compensation Framework" that extends clawback periods and applies them to more of the bank's staff. It also tilts the balance toward fixed over variable pay. There are plans to cut headcount by 9,000 by 2018.

It's also worth remembering that Deutsche Bank's top executives took no bonus for 2015. Setting that example may be the most meaningful action on pay in the short term. Perhaps it will buy Cryan time and goodwill as he tries to slowly dislodge the entrenched compensation culture across the bank. He certainly needs something better than the rarefied pay and perks of the past.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Duncan Mavin in London at

To contact the editor responsible for this story:
James Boxell at