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Deutsche Bank CEO's Future at Stake - ASHARQ AL-AWSAT English Archive
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FRANKFURT, Germany, (AP) -Deutsche Bank CEO Josef Ackermann’s future is on the line as he goes on trial again this week for approving disputed multimillion-euro (dollar) bonus payments to executives in a 2001 takeover battle.

Ackermann, who has helped steer Germany’s biggest bank to record profits while cutting costs, has said that he would resign if found guilty in the retrial, which opens Thursday.

His style has often drawn criticism in Germany — the bonuses paid to departing executives at Mannesmann AG were viewed by many as excessive, and Deutsche Bank once caused outrage for announcing a healthy profit together with hefty job cuts.

The charges relate to Ackermann’s activities on Mannesmann’s board, not at Deutsche Bank, which has offered him its full backing. Ackermann did not receive money himself and has rejected the accusations.

Ackermann’s spokesman, Klaus Thoma, said Tuesday that the chief executive had no comment about the retrial. But in February, the Swiss-born executive told reporters that he would step down if convicted.

“If I were to be found guilty, it would be self-evident,” the 58-year-old said — a statement that he reiterated in June.

In 2004, Ackermann — a former member of Mannesmann’s board — and five others were acquitted of breach of trust over allegations that they illegally engineered payments to executives at Mannesmann after its takeover by rival Vodafone Group PLC. The 180 billion euros ($226 billion) deal was the largest corporate merger ever at the time.

In all, bonuses and retirement packages of 150 million marks ($97 million) to executives were approved. Prosecutors have argued that a special severance payment of more than 15 million euros to former Mannesmann CEO Klaus Esser was not in the interests of the company.

After prosecutors appealed, the case was revived last December when Germany’s Federal Court of Justice ordered a retrial.

The protracted legal proceedings have been a distraction as the bank strives to become more international in its reach while shoring up its position at home.

“It’s been quite a saga,” said analyst Jan Randolph, who follows the banking sector for Global Insight.

“Before, most of his (Ackermann’s) daytime job was involved in court with legal issues,” Randolph said. “There were questions of about how much time he was devoting to work.”

If Ackermann and the others are acquitted, it could send a signal that the big-money pay practices prevalent in U.S. and British banking have a chance of taking root in Germany.

In Germany, awards of the size awarded to the Mannesmann managers are uncommon and top executives’ compensation is generally more modest than in the U.S.

“I get the impression that Ackermann is trying to make a point. He’s basically saying this is the way in which banking has changed. These practices are acceptable elsewhere, and Germany is behind and Germany is being old-fashioned,” Randolph said. “It’s become more than just the technical legal breach.”

It was not immediately clear how the long the retrial would last. The first trial dragged on for six months.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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