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Commerzbank boss sees wages soar despite debts
Photo: DPA

Commerzbank boss sees wages soar despite debts

Published: 02 Oct 2012 09:46 GMT+02:00
Updated: 02 Oct 2012 09:46 GMT+02:00

The chief executive of Germany's second biggest bank, Commerzbank, which is still a quarter state-owned after a bail-out, admitted to a parliamentary committee he has more than doubled his salary despite the continuing debt.

After suffering considerable losses during the recession, the German government granted Commerzbank an €18 billion bail-out. Only part of the money has been paid back and the bank remains 25 percent state owned.

Despite the bank not clearing its debt, and dipping in and out of financial hot water, chief executive Martin Blessing's salary was uncapped and went from €500,000 to around €1.3 million in a year, the Süddeutsche Zeitung newspaper said on Tuesday.

The paper revealed that he was called in front of a government financial market panel last month to explain the decision, and according to one insider, “to justify his massive pay-rise.”

His argument was that the increase was not a pay-rise, per say, but that previous restrictions on his original wage had been lifted – an explanation that the Süddeutsche Zeitung said left few on the panel convinced.

Commerzbank struggled through 2011 and 2012, with the government even mulling a second multi-billion euro bailout in December last year. It remains to be seen whether investors will receive dividends from the bank – meaning that it may not have turned a profit this year.

Bank officials told a meeting in London last week it was still not certain whether interest could be paid on the tax payers’ shares.

Blessing is working on a new strategy for the bank, while industry insiders are expecting around 1,000 jobs to be cut.

The Local/jcw

The Local (news@thelocal.de)

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Your comments about this article

11:38 October 2, 2012 by keeps71
Hope shareholders refuse to ratify this remuneration package. Disgraceful.

'Per say'? Shurely shome mishtake? Per se, perhaps?
15:50 October 2, 2012 by Berlin fuer alles
No surprise here. Has it ever been any other way?
15:00 October 4, 2012 by cobalisk
Disgraceful - the bank has been in tatters and the share price is less than 2€.

How can an executive be rewarded for such poor performance?

I was a shareholder but sold my stake earlier in the year. I saw little chance of a turnaround. This only adds to the impression I had that the bank will be in the hole for quite some time.
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