Commerzbank Says in Appeal Dresdner Bonus Ruling FlawedKit Chellel
Commerzbank AG said a U.K. judge’s decision to award bonuses to more than 100 Dresdner bankers who sued the second-biggest German lender was “seriously flawed” and should be overturned.
Judge Robert Owen ruled in May that Commerzbank must pay out about 50 million euros ($65 million) to 104 Dresdner bankers because of a promise made by management in 2008, before they were employed by the Frankfurt-based lender. Commerzbank, which bought Dresdner in 2009, said the awards weren’t deserved after a 6.5 billion-euro loss at its investment-banking division.
The employees should have understood that “while disappointing for them personally, the bank’s approach was at the very least reasonable” and cutting their bonuses was justified by “the worst performance in the history of the bank,” according to documents for today’s appeals court hearing.
At the 2012 trial, Commerzbank Chief Executive Officer Martin Blessing said cutting bonuses by as much as 90 percent was the right thing to do. Stefan Jentzsch, Dresdner’s CEO at the time of the buyout, had told employees in a 2008 meeting they would get a share of a guaranteed 400 million-euro bonus pot if they stayed at the bank while it was sold.
European lawmakers want to ban bonuses that are more than twice bankers’ salaries, strengthening what are already some of the world’s toughest pay curbs. Blessing, who criticized the Dresdner bankers for being motivated by money not loyalty, has said he isn’t worried about the proposed rules.
Commerzbank bought Dresdner from Allianz SE in January 2009, the same year it took an 18.2 billion-euro bailout from Germany.
Mark Levine, a lawyer for some of the Dresdner bankers, declined to comment in an e-mail.
Commerzbank said Jentzsch’s comments weren’t legally binding and it had the right to change terms of employment for the bankers, according to court documents.
“The bank acted responsibly and reasonably in its decision to reduce the bonus awards,” because of the 2008 losses, Commerzbank spokesman Andrew Walton said in an e-mailed statement.
The lender has been sued by employees in Germany, Italy and Japan over bonus cuts.