Wave of litigation comes after bonuses go unpaid
Hundreds of bankers sue for £50 million in unpaid bonuses
Dresdner posted a €6.3 billion loss for 2008, and although the bank's previous owner, Allianz, set aside €400 million in its annual bonus pot for global staff last summer, Commerzbank took the decision to slash bonuses by 90% in January. The move was allowed as the bank invoked a material adverse change clause caused by the fact that it was forced to go cap in hand to the German government for an €18.2 billion bail-out.
Although Dresdner senior executives waived their bonuses, other angry staff have instructed two law firms, Manches and Mishcon de Reya, to retrieve their money. One employee is reported to be demanding more than £10 million, reports UK paper The Evening Standard.
The German chancellor Angela Merkel has reacted with outrage that firms bailed out by the government should still award multi-million pound bonuses.
However the bankers maintain that they have a strong case as they were notified in writing of the size of their bonuses before the payments were revoked. To ensure that staff remained at Dresdner following the takeover, Allianz placed the bonus pool in a separate account to assure staff their bonuses would be paid - these assurances were presented to the Financial Services Authority, which has already warned Dresdner of the operational risks of its staff leaving en masse as a result of the takeover. Speaking to the Standard, Michael Diekmann, chief executive of Allianz, confirmed he told Dresdner staff in August the bonus pot had been set aside. "The FSA approached us and asked us to ensure personnel stability," he said.
This, along with the written confirmation of bonus amounts to staff, indicates that the employees could have a strong case against Commerzbank.
Other former Dresdner staff in New York, Singapore and Germany are also believed to be considering legal action, says the London newspaper.
Commerzbank has not yet commented on the suit.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
EU trade repository matching disrupted by Emir overhaul
Some say problem affecting derivatives reporting has been resolved, but others find it persists
Barclays and HSBC opt for FRTB IMA
However, UK pair unlikely to chase approval in time for Basel III go-live in January 2026
Foreign banks want level playing field in US Basel III redraft
IHCs say capital charges for op risk and inter-affiliate trades out of line with US-based peers
CFTC’s Mersinger wants new rules for vertical silos
Republican commissioner shares Democrats’ concerns about combined FCMs and clearing houses
Adapting FRTB strategies across Apac markets
As Apac banks face FRTB deadlines, MSCI explores the insights from early adopters that can help them align with requirements
Republican SEC may focus on fixed income – Peirce
Commissioner also wants a revival of finders’ exemption, more guidance for UST clearing
Streamlining shareholding disclosure compliance
Shareholding disclosure compliance is increasingly complex due to a global patchwork of regulations and the challenge of managing vast amounts of data
Banks take aim at Gruenberg’s brokered deposit rule
Regulatory lawyers question need to reverse 2020 rulemaking just four years later