By Nicholas Comfort for Bloombereg
Anshu Jain, who stepped down as Deutsche Bank AG co-chief executive officer at the end of June, received 2.2 million euros ($2.5 million) of severance pay and can keep a chauffeured car at the company’s expense until he leads another firm.
The payout comprises “compensation payments for non-competition agreed in the employment contract,” Deutsche Bank said in a statement on Friday. The 53-year-old was also awarded a one-time insurance amount related to pension plan benefits of 1.5 million euros.
“While this may look overly generous, it probably has made it easier for Deutsche Bank to deal with another distraction and get on with the monumental job of getting back on track,” said Christopher Wheeler, a London-based analyst at Atlantic Equities LLP. “It’s clear Deutsche Bank wanted to respect what he had achieved in ensuring the best split possible and avoid a lot of ‘noise’ around the move.”
Stefan Krause, the bank’s former chief financial officer, is getting a severance payment of 5.2 million euros, the most of five executives who left or stepped down from the management board last year, Deutsche Bank said.
Jain, who helped build Deutsche Bank into a fixed-income powerhouse in two decades at the company, stepped down in June amid a series of top-level shuffles across European banks. His successor, John Cryan, took over running a lender plagued by billions of euros in legal costs tied to misconduct and doubts over strategy.
Jain will have use of an office and secretarial support as well as the chauffeur-driven car “to use to a reasonable extent until June 30, 2017, at the latest or until he assumes another position of professional activity in a leadership function,” the bank said. He consulted for Deutsche Bank through 2015.
The lender said it has assumed the 382,000 euros of costs incurred for legal advice provided to Jain in connection with the termination agreement. Any costs incurred for tax advice provided in connection with compensation and benefits resulting from his employment relationship with the bank will be paid until the end of June next year.
While the expense of a chauffeur and an office may be insignificant for a company of Deutsche Bank’s size, the perks send a negative signal to the firm’s employees as they face layoffs and bonus cuts, according to Alex Edmans, a finance professor at London Business School.
Cryan said last week that management-board members no longer have personal drivers and now draw on a pool as part of his efforts to reduce costs. The firm also cut the bonus for 2015 to 2.41 billion euros from 2.71 billion euros for 2014.
Jain is joining Social Finance Inc., the online lender known as SoFi, starting as an adviser. He will probably take a seat on the board in the coming months, the San Francisco-based company said last month.
The article first appeared in Bloomberg