New compensation rules

Since the financial crisis, the public has taken a critical view of banks’ compensation practices. The bank is working to improve this image. Redesigning the bank’s compensation and benefit schemes form an important part of the bank’s strategic human resources initiatives. Deutsche Bank is constantly refining its reward structures for the future, in line with national regulations and Strategy 2015+.

In 2013, the Independent Compensation Review Panel completed its work of comparing compensation systems with best practices in the banking sector and examining the systems in light of current and expected regulatory requirements. For a sustainable and transparent compensation system, the Independent Compensation Review Panel recommended that Deutsche Bank introduce selected core principles to facilitate the process of deciding on specific compensation, governance and disclosure procedures. The bank is currently implementing these recommendations.

The bank continues to view variable compensation as an important tool to reward, incentivize and retain talented employees. Deferring a significant percentage of variable compensation awarded to senior employees provides an appropriate method for aligning compensation with the long-term success of Deutsche Bank. It is important that variable compensation is appropriately structured and, to that end, a number of improvements were made to the compensation processes and policies in 2013, including the enhancement of variable compensation forfeiture provisions in response to increased industry scrutiny. This is in line with regulators’ demands for more rigorous forfeiture requirements and the option given to banks to forfeit awards for longer periods.

To strengthen the system of compensation governance, Deutsche Bank also expanded the mandate of the Group Compensation Oversight Committee, making it a full-fledged monitoring and review body. In 2013, as required by law, the Supervisory Board established a Compensation Control Committee dedicated to intensively addressing compensation issues. Additional details on the changes in compensation are presented in Deutsche Bank’s Compensation Report 2013.

Key figures comparison

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