Top Boss Says That Comp Structures No Longer 'Untouchable'

Deutsche Bank CEO Josef Ackermann certainly knows how to make the news. Over the course of the last few weeks, Ackermann has come out and expressed his very printable views on the subprime debacle, the state of the global economy and the need for financial markets regulators who can operate across borders. Now he has been talking about staff bonuses.

Speaking at a financial markets regulation conference earlier this week, Ackermann said that the question of compensation structures were 'now on the menu. It is no longer untouchable'. Deutsche's boss was talking about the subject vexing many investment banking executives at the moment - how do you incentivise traders to take calculated risks (which will mean potentially larger bonuses for them), yet make sure that they are acting at all times in the best interests of the firm ? Reuters reports that Ackermann said: 'The big problem with compensation is how do you create a culture where people suffer jointly and win jointly ? ......How do you align this interest into a group thinking ?'.

Merrill Lynch CEO John Thain, of course, has said that he intends to tackle this issue. He plans to institute a compensation (bonus) structure which will be based on first the overall performance of the firm, then the unit an employee is working in, and finally the individual's own performance. It's a system that, after all, works pretty well over at Goldman Sachs.