It may not do wonders for office harmony, but restricting bonuses to a few fortunate individuals with contractual agreements is becoming de-rigueur at banks that have received money from the state.
The latest to do so is Commerzbank. According to a statement this morning…
…employees and members of the Board of Managing Directors of Commerzbank will not receive a bonus for 2008…. This principle applies to Commerzbank AG and all fully owned subsidiaries [AKA Dresdner Kleinwort].
It does, however, look like Commerz will be honouring the retention bonuses which were promised to Dresdner Kleinwort staff last August…
… individually agreed salary components will also be settled.
Commerzbank didn’t immediately return a call asking for comment, but in a conference call it said the guarantees amount to around €120m in total. Spread between Dresdner Kleinwort’s 2,000 or so staff in London, this would amount to €60k a head.
Employment lawyers representing Dresdner bankers with guaranteed bonuses said most were expecting to receive guarantees, but nothing else. However, one Dresdner insider said the situation remained uncertain.
Employment lawyer Ronnie Fox says bankers at Dresdner and RBS who receive a zero bonus after making money for their firm can argue that the award is “irrational and perverse.”
“The bank as a whole may have made a loss, but you could argue that the loss would have been twice as much if some individuals had not made money and that it would be irrational and perverse not to pay them,” Fox says.