When bankers justify their sometimes quite high salaries, they like to refer to the principles of the market economy. Their performance? A scarce good. Your contribution to the company’s success? Enormous. If you don’t understand that, you haven’t understood the rules of the market.
Stupid only when they are “capitalists” of all things, and as such one can certainly understand shareholder advisors who nevertheless criticize the high salaries. as “excessive” referred recently For example, the influential consulting firm Glass Lewis unflattered Asoka Wöhrmann’s remuneration. Until a few weeks ago, he was head of the listed Deutsche Bank subsidiary DWS, the largest German fund company. Glass Lewis advises professional investors worldwide on how to vote at shareholders’ meetings. According to the consultants, Wöhrmann’s reasonable fixed salary (EUR 2.4 million per year plus a bonus of EUR 4.5 million) is well above the industry average and cannot be justified. The shareholders should therefore vote against the salary package at the general meeting.
In any case, the general meeting at the beginning of June was Wöhrmann’s last working day as DWS boss; he had to give up his job after a raid because of suspected greenwashing. And because he allegedly “voluntarily” resigned, Wöhrmann collects his salary – as of now – until the end of the contract further, in total probably almost 14 million euros. It was not until spring 2021 that the supervisory board extended its contract prematurely until 2024, although the greenwashing allegations had just become rumored. Wrongdoing? Deutsche Bank, which holds 80 percent of DWS and is the head of the supervisory board with Karl von Rohr, has allegedly not been able to prove it so far.
He had to give up his job because of suspected greenwashing: the former CEO of DWS, Asoka Wöhrmann.
(Photo: Friedrich Bungert/SZ)
The payment of his successor Stefan Hoops, however, should not irritate Glass Lewis any less. According to SZ information, the supervisory board has now helped him to an even higher paycheck than his predecessor: the 42-year-old has negotiated a fixed salary of 2.8 million euros plus a bonus of 4.4 million euros. And that despite the fact that Hoops only has an indirect idea of the fund business, the core topic of DWS, which ensures stable income for the Deutsche Bank Group. Hoops actually comes from investment banking, during the financial crisis he was responsible for selling complicated financial products at Deutsche Bank. In 2019 he took over responsibility for the corporate customer business, which he wanted to develop into the new stable pillar of the financial institution. He is considered a confidant of CEO Christian Sewing.
“Advance praise, for what actually?”
Although Hoops missed its target (strong earnings growth), the parent company rolled out the red carpet for it anyway. And apparently he didn’t even have to assert himself against competitors. An official search procedure was saved, although criticism of Wöhrmann had been smoldering for some time. Deutsche Bank does not want to comment on why. A DWS spokesman said Hoops had waived a clause that had previously been customary there, according to which he could have voluntarily returned to his old service contract after three years.
For shareholders, however, the salary package is rather moderate. “The stock is doing badly, but Hoops is getting monetary advance credit for what actually?” one asks oneself with a larger shareholder of DWS. Another larger shareholder said: “Nobody else in the industry deserves that. Remarkable”. In fact, the DWS share price has lost more than 30 percent in the past year. After the raid at the end of May things continued to go downhill.
The main triggers for the fall in the price were “greenwashing allegations” by the former head of sustainability at DWS, who in the summer of 2021 Wall Street Journal had revealed. She had accused DWS of selling its equity funds as more sustainable than they really are. As a result, several US authorities and the German financial supervisory authority began investigations. What was unknown until the raid at the end of May: The Frankfurt public prosecutor’s office and the Federal Criminal Police Office have also been investigating suspected prospectus and capital investment fraud since January 2022. The investigation is aimed at previously unknown employees and managers at DWS, which denies any misconduct by its managers.