Former executives at what used to be Dresdner Kleinwort either haven?t gotten the message or refuse to abide by it. Here it is again: When you have helped manage a financial firm driven to the public trough for survival, it?s uncool to gulp down huge bonuses at a time of historic losses.
Not caring that their one-time employer now is on Germany?s dole, a trio of former London-based managers of Dresdner Kleinwort have filed suits in the UK to get what they say they deserve: bonuses and severance pay.
All ex-members of the executive committee, their claims total almost 14 million euros, or $19.6 million. That brings to eight the former executives of the investment bank suing in London.
That they were granted those bonuses is hard to dispute. In letters beginning in August and dated as recently as January, Dresdner spelled out how much in bonuses and severance it would pay them. In February, after Commerzbank AG took over Dresdner, a different letter arrived. ?The bank has decided it is in the best interests of DKIB, Dresdner Bank and Commerzbank AG that no 2008 bonuses, whether contractual or discretionary, will be paid? to executive committee members, it said, according to two of the lawsuits.
When some of the managers wouldn?t take no for an answer, another letter showed up.
?Given the scale of the losses,? Dresdner wrote, ?the bank believes that you are required to act in the best interests of DKIB.?
OK, so what counts more, the bank?s promise to reward an executive, or the executive?s duty to put the bank?s welfare above his own?
Morally, the answer is clear. But is that a legal argument?
There are letters containing promises of more pay, written even after it became clear that Dresdner Kleinwort and its parent bank were in trouble, even as Commerzbank was preparing to take it over.
And yet it looks like the bank might argue in court that an executive?s fiduciary duty to the bank trumps promises made to him.
At least some Dresdner Kleinwort executives got the message loud and clear. Former chief executive officer Stefan Jentzsch said no thanks to his 2008 bonus. So did his counterpart at Dresdner Bank, Herbert Walter.
That is an example the others should have followed. Instead, they?ll be in court demanding reward when they should be offering apologies.