February 20, 2009

In Germany, bonus rage has a face

Bonuses paid to failed bankers struck a raw nerve in Germany with Chancellor Angela Merkel calling the lavish bonus system incomprehensible.

World leaders from U.S. President Barack Obama, British Prime Minister Gordon Brown and now Merkel have expressed dismay over bonuses that banks have doled out to executives that led their firms and world finances into economic chaos.

It is incomprehensible that banks helped out by the state in many cases pay out huge sums in bonuses, Merkel told Der Spiegel.

In Germany, the excesses have found a face. Investment banker Stefan Jentzsch, who was on his yacht in the Caribbean, is still raking in millions after his bank lost billions, Der Spiegel reported.

Jentzsch was the head of Dresdner Kleinwort, which lost $2.86 billion January through September last year.

Not only did the company do poorly, but it's parent, Dresdner Bank did lost billions.

Dresdner Bank was rescued by Commerzbank, which was, in turn, bailed out twice by the German government.

However, Jentzsch had already departed with $10.4 million in severance pay and a guarantee Dresdner Kleinwort's former owner Allianz would pay out $520 million in bonuses to his former firm's investment bankers.