Deutsche Bank: Common principles for management remuneration

10 July 2013

In a joint position paper, five leading financial institutions have committed themselves to ethical principles in the remuneration of management. The core aim is to make remuneration systems open and transparent and to eliminate false incentives.

The financial institutes that have signed the paper are: Commerzbank AG, Deutsche Bank AG, DZ BANK AG, HSBC Trinkaus & Burkhardt AG and HypoVereinsbank.

The signatories have committed themselves to leadership that is orientated towards success and based on values. This requires that the remuneration and performance assessment of management also need to be built on ethical principles as well as empirical quantities and financial indicators. This demands the following:

• Every payment must be clearly justified and appropriate to the services rendered.
• A decisive factor in performance assessments is that managers are required to act according to company-specific values that need to be clearly transparent inside and outside the company and have employee and customer satisfaction as relevant facor.
• Every company should set maximum limits for the overall remuneration of its management staff for the financial year in question.
• Appropriate consideration needs to be given to market-driven earnings that cannot be specifically attributed to the performance of the company’s management when decisions are taken on profit-oriented variable payments.
• Management remuneration systems must counteract any incentives that promote excessive risk-taking.

Full article including statements by the chief executives of the participating institutes

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