2011 once again proved to be a year in which the compensation regulatory environment changed throughout the financial services industry. Deutsche Bank engages pro-actively with regulators on a global basis. One of the difficulties lies in the fact that the speed, scope and content of regulatory reform varies around the world. Against this regulatory background, a major task is to ensure we have a universal compensation policy which both corresponds to our “One Bank” philosophy and at the same time is accepted by all employees. In this context, Deutsche Bank is faced with the challenge of competing for top employees while also meeting political and regulatory requirements.
Despite evidence of continuing global disparities, to a certain extent regulators began to refine and align their focus in relation to the process of identifying so-called “material risk takers” in both Europe and the United States. These employees are deemed to have a major influence on the bank’s overall risk profile. Also under increased scrutiny were the methodologies used in the clawback of awards for certain variable compensation components. To this end, Deutsche Bank made a number of significant enhancements during the year. The population of employees subject to the German Regulation on Remuneration in Financial Institutions (Institutsvergütungsverordnung – InstVV) has increased significantly, especially on a global scale. Outside of this population, Deutsche Bank has also voluntarily chosen to implement a performance-based clawback for all employees receiving deferred compensation awards.