Commerzbank brings in bonus clawback option
GERMANY’S Commerzbank will introduce a clawback option to its bonus system next year as the banking industry aims to stop the short-term risk-taking that helped bring about the financial crisis.
The bank, 25 per cent owned by the German state after an €18bn (£16.1bn) bailout, is responding to public outrage over the eye-popping payouts made to bankers who mainly worked at the bank’s loss-making investment bank.
Although regulators and politicians broadly agree that risk-hungry behaviour by highly paid bankers was one of the main causes of the crisis, they have struggled to agree on how to regulate or cap bonuses.
Unicredit, Morgan Stanley and UBS have responded to political pressure by overhauling their bonus systems to include clawback options. Deutsche Bank has said it will look at introducing such a measure.
For Commerzbank, the new system announced yesterday is part of a wider push by chief executive Martin Blessing, who won’t get a bonus this year, to clamp down on payouts that reward only short-term performance.
Frankfurt-based Commerzbank will stagger bonus payouts and drop them altogether if the bank’s performance has suffered, Commerzbank said in a statement.