In light of the financial crisis, many companies have found ways to do more with less. In other words, cutting back on resources and maintaining costs while keeping compensation and bonuses under control have worked for many companies as they tried to emerge from the deepest recession. But for bankers, they are still being too much, said Deutsche Bank Chief Executive John Cryan at an academic conference earlier this week.
In a Reuters article, Cryan told the audience that corporate governance is an important part of maintaining soaring compensation. “Compensation is still too high,” Cryan told the conference. “We’ve just paid people too much across the board.”
Cryan said that seven years after recession, traders were immediately rewarded for profits that could have easily slipped away. “Many people in the sector still believe they should be paid entrepreneurial wages for turning up to work with a regular salary, a pension and probably a healthcare scheme and playing with other people’s money,” Cryan added, according to the Guardian.
Even though many employees in the banking sector were working to do the right thing and improve their daily performance, there were still some slackers who believe they are entitled to an outsized compensation despite negative performance.
Moreover, banks should enhance its overall governance processes and create robust controls that can cut back on incentives that don’t align with poor performance.
Cryan’s comments come weeks after a warning was issued about staff bonuses at Deutsche Bank, which urged employees to keep in mind the cost of the company’s fines for bonuses as the time for new-year incentives draw closer.