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ECONOMY

Commerzbank slashes employee bonuses

Commerzbank said on Friday it would slash employee bonuses for 2012 with chief executive Martin Blessing foregoing his altogether following the bank's "unsatisfactory" performance last year.

Commerzbank slashes employee bonuses
Photo: DPA

“As a consequence of the unsatisfactory net profit, variable remuneration as a whole for 2012 will be 17.2 percent lower than in the previous year,” Commerzbank said in a statement.

Bonuses were cut by around 20 percent in the investment banking division alone. The move – which affects all employees including the executive board – helped bring down personnel costs last year by 5.3 percent to €3.96 billion ($5.3 billion) and came after a similar bonus cut of 12.1 percent in 2011.

“We are following a clear principle: the greater the responsibility, the lower the variable remuneration by comparison,” Commerzbank said. Indeed, CEO Blessing had already informed the bank’s supervisory board in December that he would forego “all his claims from variable remuneration for 2012,” it added.

Germany’s second-biggest lender confirmed its disappointing 2012 results, already released earlier this month. Net profit came out at only €6 million for the whole year compared with €638 million a year previously, after heavy write downs pushed it into the red in the fourth quarter.

However, underlying earnings, as measured by operating profit, increased to €1.2 billion in 2012 from €507 million. Last month, Commerzbank said it would axe 4,000-6,000 jobs – more than one in 10 of its workforce – over the coming three years as it tots up the toll from the financial and sovereign debt crisis.

Commerzbank shares were the biggest gainers on the Frankfurt stock exchange on Friday, adding 3.32 percent in a steady market.

AFP/kkf

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MONEY

Italy expands €200 payment scheme and introduces public transport bonus

Italy's government will extend its proposed one-time €200 benefit to more people and introduce a €60 public transport payment, Italian media reported on Thursday.

Italy expands €200 payment scheme and introduces public transport bonus

Seasonal workers, domestic and cleaning staff, the self-employed, the unemployed and those on Italy’s ‘citizens’ income’ will be added to the categories of people in Italy eligible for a one-off €200 payment, ministers reportedly announced on Thursday evening.

The one-time bonus, announced earlier this week as part of a package of financial measures designed to offset the rising cost of living, was initially set to be for pensioners and workers on an income of less than €35,000 only.

However the government has now agreed to extend the payment to the additional groups following pressure from Italy’s labour, families, and regional affairs ministers and representatives of the Five Star Movement, according to news agency Ansa.

Pensioners and employees will reportedly receive the €200 benefit between June and July via a direct payment into their pension slip or pay packet.

For other groups, a special fund will be created at the Labour Ministry and the procedures for claiming and distributing payments detailed in an incoming decree, according to the Corriere della Sera news daily.

One new measure introduced at the cabinet meeting on Thursday is the introduction of a one-time €60 public transport bonus for students and workers earning below €35,000. The bonus is reportedly designed to encourage greater use of public transport and will take the form of an e-voucher that can be used when purchasing a bus, train or metro season pass.

Other provisions reportedly proposed in the energy and investment decree (decreto energia e investimenti), which is still being adjusted and amended, include extending energy bill discounts, cutting petrol excise duty and rolling on the deadline to claim Italy’s popular ‘superbonus 110’.

The €14 billion aid package, intended to lessen the economic impact of the war in Ukraine, will “fight the higher cost of living” and is “a temporary situation”, Prime Minister Mario Draghi has said.

The Local will report further details of the payment scheme once they become available following final approval of the decree.

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