Deutsche Bank’s asset management business is preparing to increase bonus payments as much as 10%, a stark contrast to the cuts expected at the lender’s once mighty securities unit.
DWS has been awarded a bonus pool that’s 5-10% bigger than last year, reflecting increased profits and assets, according to people with knowledge of the matter. In the parent company, overall variable compensation is set to drop by about 20% and by about 30% in the investment bank, people familiar with the matter have said.
DWS CEO Asoka Woehrmann last week reported strong inflows that helped drive a 26% increase in pretax income, making it the only one of Deutsche Bank’s four core divisions to improve profitability last year. The bank overall posted a pretax loss of $2.85 billion after booking last year most costs related to its latest turnaround plan.
A DWS spokesman declined to comment on compensation speculation.
DWS started trading as a publicly listed company in early 2018 and Deutsche Bank retains a 79.5% stake. One reason for the listing was top management’s wish to have greater freedom over variable pay at DWS. Staff received $192.12 million in bonus awards last year, or just under 10% of Deutsche Bank’s total pool. Both companies will publish details on staff remuneration in their annual reports, slated for release on March 20.
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Woehrmann recently decided to abolish corporate titles such as vice president and managing director and to forego any promotions this year. There have been pockets of dissatisfaction with the decision though it is expected to level hierarchies over time and further highlight DWS’s standalone character, the people said.
The CEO has vowed to cut costs at the asset manager and he managed to reduce expenses by 1% last year. But compensation costs rose by 11% even though headcount declined. — Additional reporting by Nishant Kumar and Christoph Rauwald
