Deutsche chief shows the way by turning down bonus

The boss of Deutsche Bank, one of the City's biggest employers, today said he will not take a bonus for 2008.

Josef Ackermann, who regularly banks between €3 million and €8 million (£2.4 million-£6.2 million) in bonuses, attempted to stem anger over bankers' excessive pay by saying he would forgo his bonus in favour of "deserving'' colleagues.

That is likely to preserve big payouts for many of the 6000-plus bankers in Deutsche's London investment banking hub.

The move by Ackermann, 60, and the three other members of Deutsche's management board will put pressure on other banking bosses in Europe to follow suit.

Banks said they have taken steps to reform their pay structures but the lack of progress, coupled with a worsening of the financial crisis, has led regulators to impose pay curbs on those like HBOS and Royal Bank of Scotland which have been forced to accept part-nationalisation.

Governments and regulators in the US and Europe blame the bonus culture for excessive risk-taking that contributed to the financial crisis.

Deutsche, Germany's biggest lender, has booked about $10 billion of losses since the start of the credit crisis.

Ackermann received a performance-based payout last year of more than €8 million, plus €4.5 million under an incentive plan, according to Deutsche's annual report.

This week, Hector Sants, chief executive of UK banking regulator the Financial Services Authority, told 28 bank and building society chiefs in a five-page letter that they must take "immediate action" to ensure bonus plans for all bankers closely link rewards and long-term risk.

Ackermann has been spearheading an initiative to reform the industry's freewheeling bonus culture. He chairs the institute of international finance, which published a report in July calling for incentives to be based on longer-term measures that align staff interests with those of shareholders.