Deutsche Bank chief defends bonus payments

2nd November 2006, Comments 0 comments

2 November 2006, Dusseldorf, Germany (dpa) - Josef Ackermann, 58, the head of Germany's biggest bank, defended Thursday his approval of multi-million-euro bonus payments in 2000 that have landed him in court.

2 November 2006

Dusseldorf, Germany (dpa) - Josef Ackermann, 58, the head of Germany's biggest bank, defended Thursday his approval of multi-million-euro bonus payments in 2000 that have landed him in court.

In the country's biggest-ever corporate crime case, Deutsche Bank chief executive Ackermann and five others are accused of a breach of fiduciary trust arising from 57 million euros (72 million dollars) in bonuses paid to executives of the Mannesmann telecoms company.

Ackermann told the court in Dusseldorf that as a board member, he had approved bonuses for the men 'mainly for successes they had achieved in the past,' but also in the case of Mannesmann's then chief executive, Klaus Esser, as an incentive for the future.

Esser had wanted to help during the six-month phase of Mannesmann's absorption into the Vodafone mobile-phone group.

'The recipients were meant to apply all their skills to a successful integration of Mannesmann into Vodafone,' he said.

Thursday was the second hearing day of the re-trial, which began last week. A German appeal court directed the repeat after the six defendants had been acquitted in a Dusseldorf court in July 2004.

The payments followed Vodafone's hostile 180-billion-euro takeover, at the time the world's biggest-ever corporate merger.

In its 2004 ruling the Dusseldorf court found that Ackermann and his co-defendants, including Esser and retired trade union leader Klaus Zwickel, did not act unlawfully.

In a December 2005 verdict, the Karlsruhe-based Federal Court of Justice quashed the verdict and said Ackermann had failed to protect the assets of Mannesmann shareholders.

Others on trial are former Mannesmann board chairman Joachim Funk, ex-head of personnel Dietmar Droste and Juergen Ladberg, head of the company's joint trade union committee, who also sat on the company's board.

The bonus case triggered a major debate in Germany about executive compensation and corporate greed with big payouts and salaries for top executives having been relatively unknown in the nation, unlike many Anglo-Saxon countries. Esser left Mannesmann soon after.

Ackermann, who was a non-executive Mannesmann board member when the bonuses were agreed to, did not receive any payout himself.

The new trial is expected to last until March 2007.

Ackermann, whose reputation suffered at the last trial when he was photographed giving a V-for-victory gesture, has indicated he will step aside from his Deutsche Bank post if convicted.

DPA

Subject: German news

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