Deutsche Bank Co-CEOs Pay Raised - Analyst Blog

Co-Chief Executive Officers CEO of Deutsche Bank AG DB – Anshuman Jain and Jürgen Fitschen – received approval for compensation worth €8.97 million and €8.00 million, respectively for 2013, as per the bank's Annual Report 2013. This reflects a year-over-year increase of nearly 52% for Jain, while Fitschen's pay rose 47% from 2012.

The total compensation of the Co-CEOs includes a base salary of €2.30 million, restricted equity awards worth €3.52 million and the remaining constituted variable pay and benefits. Notably, this base salary and restricted equity awards significantly rose from €1.82 million and €1.36 million in 2012, respectively.

During 2013, Deutsche Bank encountered many challenges and failed to exhibit a significant performance. For 2013, revenues declined 5.4% year over year to €31.9 million and provision for credit losses increased 20.0% to €2.1million.  

Notably, on Jan 29, 2014, Deutsche Bank reported net loss of €965 million in fourth-quarter 2013. Later, in Feb 2014, the company put an end to all the legal tussles with Kirch Group by inking a settlement worth €775 million. Accordingly, fourth-quarter results were reinstated with which further deteriorated the results.

However, to boost its competitiveness, Deutsche Bank is in the process of implementation of a number of initiatives declared in its ‘Strategy 2015+'. These include improvement in efficiency, expense reduction, a simplified capital structure and a change in the company's compensation policies.

Notably, in 2013, under the leadership of the Co-CEOs, the bank's net income of €681 billion came in well ahead of €315 million reported in 2012. Further, non-interest expenses declined 9.0% year over year to of €28.4 million.

As Deutsche Bank is gradually striving towards resolving its operational, regulatory and legal issues, we remain optimistic about the efforts of Jain and Fitschen to turn the company around and achieve sustained growth.

Among other foreign banks, Swiss bank UBS AG's UBS CEO – Sergio P. Ermotti recently received approval for compensation worth CHF10.73 million for 2013, up 21% from CHF 8.87 million received in 2012. The hike was recognition for Ermotti's efforts in driving UBS to profitability in 2013 after incurring a loss in 2012.

Deutsche Bank currently holds a Zacks Rank #5 (Strong Sell). Some better-ranked foreign banks include Hong Kong-based Hang Seng Bank Limited (HSNGY) and South Korean bank Shinhan Financial Group Company Limited SHG. Both the stocks carry a Zacks Rank #1 (Strong Buy).