Bankers win bonuses back
FOUR former Dresdner Kleinwort bankers have won a €12.6m (£10.8m) legal battle against Commerzbank after claiming the German bank reneged on guaranteed bonuses after it bought Dresdner last year.
Commerzbank acquired Dresdner Kleinwort in January, but the investment-bank posted a €6.3bn loss for 2008. Commerzbank was then forced to take taxpayers’ money in a state bailout to prop up its balance sheet.
Commerzbank argued that the full- year loss and the financial health of the company changed the commitments to the bankers who were top executives during the bank’s slump.
But Stefan Guetter, Efstratios Hatzistefanis, Areski Iberrakene and Kaveh Taleghani, all former members of the executive committee at Dresdner Kleinwort, contested Commerzbank’s decision and took their dispute to the High Court.
The four bankers insisted their departments were profitable and their contracts entitled them to certain bonuses regardless of the bank’s wider performance.
Commerzbank has been eager to show it is not giving rewards for failure while there is hostility surrounding excessive bonuses for bankers.
But Justice Jack said that there was a difference between public fury and contract law and said the matter before the court was one of law. Jack said: “That the public might be concerned over the size of bankers’ bonuses is no reason to have a trial where there is no defence.”
More than a dozen cases have been lodged in London and Frankfurt over bonus and severance pay that was withheld after Commerzbank took over Dresdner Kleinwort, but most cases have settled out of court.