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Banking | 06.04.2009

Ackermann criticizes bankers for taxpayer-funded bonuses

Großansicht des Bildes mit der Bildunterschrift: Ackermann saw Deutsche Bank's profits fall to historic lows in 2008

Long Germany's personification of unscrupulous greed, Deutsche Bank chief Josef Ackermann has called on his colleagues to take a more moderate approach to bonuses and other compensation.

Ackermann criticized bankers for failing to act responsibly and accepting bonuses during the ongoing economic crisis.

"For a lot of people, what is happening is unimaginable," Ackermann said of bonuses payments made to bank managers in the mass-circulation Bild newspaper's Monday edition. "Not everything that a person is legally entitled to is also legitimate."

As many of the current economic difficulties plaguing the globe resulted from mismanagement in financial institutions, Ackermann said the people responsible for causing the crisis should not be rewarded for their mistakes with bonus payments funded by taxpayers.

"When lots of people are suffering from the economic crisis - and lots of people are - then bank managers have to make sacrifices," he said.

Public outrage

Bildunterschrift: Großansicht des Bildes mit der Bildunterschrift: Bankers should have to make sacrifices like the rest of the public, according to Ackermann

Ackermann was one of the first bankers in Germany to forgo his bonus and saw his annual compensation drop by nearly 90 percent to 1.4 million euros ($1.9 million) in 2008.

The public's ire has been raised recently by million of euros in bonuses paid to leading executives at Dresdner Bank. Dresdner was taken over by Commerzbank, which has received billions in state aid.

In its financial rescue package, the German government put a 500,000-euro limit on salaries for board of director members and said bonuses would not be paid at institutes that receive federal bail-out funds.

Ackermann said he would be ashamed if Deutsche Bank, Germany's largest bank, had to rely on a government bail-out in order to stay solvent, but he added that whether a bank accepts state money should not play in a role in top managers' behavior.

"We have to send a signal in the interest of social peace, which is also in our own interests," Ackerman said.

Just over two years ago, a court dropped charges of breach of fiduciary duty against Ackermann for approving huge bonus payments in exchange for a financial settlement of 3.2 million euros.

dw